Ilmiy tadqiqot markazi

 
ФОЙДАЛАНИЛГАН АДАБИЁТЛАР РЎЙХАТИ
 
1.
 
Ўзбекистон Республикаси Президентининг 2022 йил 28 январдаги “2022
-
2026 йилларга 
мўлжалланган Янги Ўзбекистоннинг тараққиёт стратегияси тўғрисида”ги ПФ
-60-
сон Фармони.
 
2.
 
Ўзбекистон Республикаси Марказий банки йиллик ҳисоботи. 2021 йил.
 
3.
 
Ўзбекистон Республикаси Марказий банки статистик бюлетенлари. 2019
-
2021 йиллар.
 
4.
 
https://president.uz/uz/lists/view/4551 
 
THE BANKING SYSTEM OF THE REPUBLIC OF UZBEKISTAN: WHY INVESTING
IN DIGITAL TRANSFORMATION IS ESSENTIAL 
 
Alimjanova Kamila - 
TSUE, Finance and financial technology,
Group MT-81, 3 rd year student 
 
The world is rapidly moving towards digitization, and the banking sector is no exception. 
Digital transformation is the integration of digital technology into all areas of a business, which 
fundamentally changes the way it operates and delivers value to customers. The banking sector is 
at the forefront of this transformation, as customers increasingly demand digital services that are 
faster, more convenient, and accessible anywhere and anytime. This transformation has become 
even more crucial with the COVID-19 pandemic, which has accelerated the shift towards 
digitalization.
In Uzbekistan, the banking sector has seen steady growth over the past few years, with a 
significant increase in assets, loans, and deposits. According to the Central Bank of the Republic 
of Uzbekistan, the total assets of the banking sector reached 555.3 trillion Uzbekistan soums 
($49.3 billion) in 2022, a 28,5% increase compared to the previous year. Loans and deposits also 
increased by 19,1% and 51%, respectively. [1] 
Despite this growth, the banking sector in Uzbekistan faces several challenges, including 
low financial inclusion, inefficient processes, and a lack of digital infrastructure. The World Bank 
estimates that only 44% of adults in Uzbekistan have a bank account, and only 42% have access 
to digital financial services. [2] This highlights the need for investment in digital sphere in order 
to improve financial inclusion and access to banking services. 
One of the primary challenges is the lack of digital infrastructure, including internet 
connectivity, which limits the reach of digital financial services, particularly in rural areas. To 
address this challenge, the government has been investing in expanding the country's digital 
infrastructure, including improving internet connectivity and mobile network coverage.
Another challenge is the low digital literacy rate among the population, which limits the 
adoption of digital financial services. According to the United Nations Development Programme, 
only 33% of Uzbekistan's adult population has basic digital skills. To address this challenge, the 
government has been implementing various programs to promote digital literacy, including 
training programs for teachers and students, as well as awareness campaigns targeting the 
general public. [3] 

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150 
The lack of sufficient cybersecurity measures is also a significant challenge facing the 
banking sector. Cyber threats, including phishing attacks, malware, and ransomware attacks, are 
on the rise globally, and Uzbekistan is not immune. To address this challenge, banks need to 
implement robust cybersecurity measures, including firewalls, intrusion detection systems, and 
encryption technologies. The government can also play a role in strengthening cybersecurity 
measures by implementing cybersecurity regulations and guidelines. 
According to a study by Accenture, digital banks have 2.5 times higher return on equity 
(ROE) than traditional banks. Additionally, digital transformation can reduce costs by up to 20% 
and increase revenue by up to 10%. By investing in digital transformation, banks in Uzbekistan 
can improve their profitability and competitiveness in the market. For example, the National 
Bank of Uzbekistan (NBU) has implemented a digital platform IBank for processing payments 
and has reported a 40% reduction in processing time and a 30% reduction in operational costs. 
[4] 
Digital transformation has also enhanced the customer experience by providing more 
personalized and convenient services. Customers can now access banking services from 
anywhere, at any time, using their mobile devices. Banks have also been using data analytics to 
gain insights into customer behavior and preferences, enabling them to offer more tailored 
services and products. 
It is worth noting that the government of Uzbekistan also has been implementing various 
initiatives to promote digitalization and financial inclusion in the banking sector. One of the 
significant digital transformation initiatives implemented is the introduction of mobile banking 
services. Several banks in Uzbekistan have launched mobile banking applications that enable 
customers to access banking services from their mobile devices, including account balance 
inquiries, fund transfers, bill payments, and loan applications. For example, Asaka Bank, one of 
the largest banks in Uzbekistan, launched its mobile banking application, Asaka Mobile, in 2020. 
As of 2022, the app has over 1 million downloads, and the bank reports that over 50% of its 
customer transactions are now conducted through digital channels. [5] 
To promote financial inclusion, the government has also launched the "Electronic Wallet" 
program, which aims to provide financial services to the unbanked population using mobile 
devices. The program enables users to deposit, withdraw, and transfer funds using their mobile 
devices, without the need for a bank account. As of 2022, over 8,4 million electronic wallets have 
been registered, according to the Central Bank of Uzbekistan. [6] 
Uzbekistan's digital transformation efforts in the banking sector can be compared to other 
countries' efforts to identify potential areas for improvement. According to the World Bank, 
Uzbekistan ranks 124th out of 190 countries in the ease of doing business rankings, indicating 
that there is room for improvement. However, the country has made significant progress in 
recent years, with its ranking improving by 15 places between 2020 and 2022.
Uzbekistan's digital transformation in the banking sector is comparable to other developing 
countries in the region. For example, in neighboring Kazakhstan, the government has launched 
several initiatives to promote digital financial services, such as the creation of a digital 
identification system and the development of a regulatory sandbox for fintech startups. As a 
result, the volume of digital transactions in Kazakhstan increased by 2.4 times in 2020 compared 
to 2019. [7] 
Similarly, in Azerbaijan, the government has introduced several reforms to promote 
financial inclusion and digitalization, such as the creation of a digital payment system and the 
expansion of access to mobile banking services. As a result, the number of mobile banking users 

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in Azerbaijan increased by 53% in 2020 compared to the previous year. [8] In Kyrgyzstan and 
Tajikistan, digital financial services are still in the early stages of development.
In comparison to developed countries, Uzbekistan still lags behind in terms of digitalization 
in the banking sector. For example, in the United States, mobile banking penetration is over 80%, 
while in Uzbekistan, it is still relatively low. However, Uzbekistan's digital transformation efforts 
have been impressive, considering the country's limited resources and the challenges faced. 
To ensure the sustained growth of the banking sector's digital transformation in 
Uzbekistan, several recommendations can be made. Firstly, the government needs to continue 
investing in the country's digital infrastructure to expand access to high-speed internet and 
increase smartphone penetration.
Secondly, the government needs to work closely with the private sector to promote 
innovation and investment in the fintech industry. This can be done by providing incentives for 
fintech startups and facilitating partnerships between banks and fintech companies.
Thirdly, the government needs to create a legal and regulatory framework that supports the 
development of digital financial services, including promoting competition, protecting consumer 
rights, and ensuring data privacy and security. 
Finally, the government needs to focus on promoting financial literacy and education to 
ensure that the population can effectively use digital financial services and benefit from them.
In conclusion, digital transformation is essential for the banking sector in Uzbekistan to 
improve financial inclusion, efficiency, and profitability. Although there are challenges such as 
the lack of digital infrastructure and skills, investing in digital transformation can yield significant 
benefits for banks and customers alike. With the right investments and solutions, Uzbekistan can 
catch up with other countries in terms of digital banking adoption and provide its citizens with 
reliable, convenient, and accessible banking services.