Vusal Gasimli: Fintechs Serve Sustainable Economic Growth

The Central Bank, Azerbaijan Banks Association, and the Center for Analysis of Economic Reforms and Communication are jointly organizing “FINTEX SUMMIT ONLINE” Forum. The Forum that has already started is dedicated to the topic “New Trends in the Banking and Payment Ecosystems: Innovative Solutions, Fintechs, and Security”. Executive Director of the  Center for Analysis of Economic Reforms and Communication, Doctor of Economics Vusal Gasimli delivered the opening speech at the event:

“Azerbaijan is implementing comprehensive state policy to build a cashless society. Various state programs designed and implemented in the past, in particular, the State Program on the Expansion of Digital Payments in the Republic of Azerbaijan for 2018-2020 have formed a solid foundation for the future development of the cashless society. Thus, the State Program envisages measures on 4 main blocks, including institutional environment, banking sector, digital ecosystem, and awareness-raising. Among them, there are many-sided measures such as the development of the business environment, optimization of the tax system, strengthening the banking sector, and the development of digital trade.

In previous years, there have been taken institutional measures on the development of a cashless payments ecosystem. In 2020, the Digital Identification System was put into operation in the banking system. It was the first time when blockchain platform was applied. The data is stored in a database based on shared registry technology. The system ensures confidentiality. The development of this project will play a crucial role in creating a climate of trust in the sector, along with protecting the integrity, accessibility, and confidentiality of information in the banking system. Another novelty achieved during the realization of the state program is the launch of the first Instant Payment System in the country. As a result,  the QR code functions were applied and the introduction of registration, inter-account transfer, and payment functions for the population through the Internet and mobile banking services have been provided. The opportunities provided by the Instant Payment Systems will have a significant impact on the expansion of digital payments between economic entities, a significant reduction in the size of the cash economy in the country, and, ultimately, the formation of a cashless society.

Today, we can see the positive results of the comprehensive measures taken to build a cashless society. For example, as a result of measures on increasing cashless payments among the population, the share of cashless operations in the volume of operations undertaken through debit and credit cards within the country has increased by 9 percent in comparison with 2017 and reached 21 percent. The number of such operations has increased by 21 percent reaching 52 percent. It should be mentioned that both indicators are the highest in the history of the country's banking system. The high tendency of our country for rapid and innovative development ensures more comfortable absorption and wide application of new technological changes. So, we can say that Azerbaijan has big potential in terms of fintech development. Particularly, there are favorable conditions to apply insurance and real estate fintech, considered as the newest global trends, as well as regtech and supertech technologies.

The measures  undertaken and new development prospects mentioned before will ultimately have a positive impact on ensuring the transparency of economic turnover, limiting the "shadow" economy, increasing access to financial services in the real sector, and increasing investment opportunities in the banking sector.”