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IMPACT OF DIGITIZATION ON INCREASING FINANCIAL
INCLUSIVITY IN THE BANKING SYSTEM OF UZBEKISTAN
Shermamatova Iroda Oybekovna
Tashkent State University of Economics
https://doi.org/10.5281/zenodo.12219997
Digitalization of the banking system is a key factor for the development of
the financial sector and economic growth in Uzbekistan. This thesis will explore
how the adoption of digital technology in the banking sector affects financial
inclusion for the general population, especially in rural and remote areas.
Particular attention will be paid to analyzing the current state of digitalization in
Uzbek banks, identifying the main challenges and opportunities, as well as
studying successful cases and best practices that can be adapted for Uzbekistan.
Currently, Uzbek banks are actively introducing digital platforms, mobile
applications and online banking. These technologies significantly improve access
to financial services for the population. For example, mobile applications allow
you to carry out banking transactions without the need to visit branches, which
is especially important for residents of remote areas. In addition, online banking
provides customers with the opportunity to manage their accounts, transfer
money, pay for services and carry out other financial transactions at any time
and from any place where there is access to the Internet.
Among the most significant digital initiatives in the banking sector of
Uzbekistan is the introduction of mobile payment systems and Internet banking.
Banks offer customers the opportunity to make money transfers, pay utility bills
and receive loans online. This saves time and reduces transportation costs for
customers, which is especially important during the COVID-19 pandemic when
physical interaction is limited. One example of successful digitalization is the
“Click” project launched by the National Bank of Uzbekistan. The platform
provides a wide range of services including payments, transfers and bill
payments through a mobile application. Another example is the Payme system,
which is also gaining popularity among the population due to its convenience
and ease of use.
Diagram-1
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Rating of mobile banks and applications for payments in Uzbekistan
Diagram 1 provides the ranking of mobile banks and applications for
payments in Uzbekistan This rating unites mobile banks and applications for
payments - the 13 most popular services in Uzbekistan, in which residents of
Uzbekistan, using a mobile phone, can make payments and transfers, track the
status of financial products. The assessment reflects the quality of the digital
customer experience in the application based on a comparative analysis of 13
blocks of tasks that are relevant for both types of services and are associated
with transactional activity. The number of available features, their convenience
and stability were taken into account.
As we can see from the diagram 1, Uzum Bank, Payme and Click payment
systems are distinguished by their high convenience in solving frequency
problems and wide possibilities for payments: a variety of forms of payment for
utility, telecom, educational, transport services and services of budgetary
organizations, both payment standards by QR code.
Despite significant progress, a number of problems remain. Firstly, access
to the Internet and modern mobile devices is still limited in some regions of the
country. Secondly, many citizens, especially the older generation, have difficulty
using digital technologies due to low levels of digital literacy. These factors limit
the potential of digitalization and require targeted solutions.
The main challenges on the path to complete digitalization of the banking
sector include infrastructural and technological limitations. Insufficient high-
speed internet coverage in rural areas hinders access to online services.
Cybersecurity is also an important aspect, as the increase in the number of
digital transactions increases the risks of fraud and cyber-attacks. Another
0
10
20
30
40
50
60
Uzum Bank
Payme
Click
Ipak Yo'li Bank
Agrobank
Anorbank
TBC Bank
Aloqabank
National Bank of Uzbekistan
Paynet
Davr Bank
InFinBank
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challenge is the regulatory environment. Effective development of digital
financial services requires transparent and flexible regulations that promote
innovation while protecting consumer interests and ensuring data security.
However, digitalization offers many opportunities to improve financial
inclusion. Government initiatives, such as the “Digital Economy Strategy of
Uzbekistan for 2020-2030,” are aimed at developing digital infrastructure and
supporting innovation. Programs to improve digital literacy among the
population, especially in rural and remote areas, can also significantly improve
the situation.
In order to solve the above problems, the following measures are
proposed:
Infrastructure improvement:
o
Expanding Internet access in rural and remote areas.
o
Investing in the development of mobile networks and digital platforms.
Improving digital literacy:
o
Conducting educational programs and campaigns to improve the level of
digital literacy of the population.
o
Special training programs for the older generation and residents of rural
areas.
Promoting Innovation:
o
Supporting startups and fintech companies through grants and
investments.
o
Creating a favorable regulatory environment for the introduction of new
financial technologies.
Improving the regulatory environment:
o
Development of flexible and transparent regulations that stimulate
digitalization.
o
Ensuring data security and consumer protection.
In conclusion, it is worth noting that the digitalization of the banking system of
Uzbekistan represents a critical step for increasing the financial inclusion of the
country. The adoption of digital technologies significantly expands access to
financial services for all segments of the population, especially those living in
rural and remote areas. These changes not only help improve financial inclusion,
but also stimulate economic growth and improve the quality of life of the
population.
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