Microsoft Word 71-83 Fintech Development in the Republic of Uzbekistan

Participant / name of 
opportunity or threat 
1. 
Improving 
the 
manufacturability and 
competitiveness of the 
financial market 
2. 
Ensuring 
the 
technological 
autonomy 
of 
the 
financial and banking 
sector of the country 
10
https://plusworld.ru/daily/cat-exhibitions_and_conferences/tsifrovizatsiya
Journal of Advanced Research and Stability 
Volume: 02 Issue: 01 | 2022
ISSN: 2181
www.
in the service sector
10
. 
However, if at the beginning of 2020 the transition to online commerce was associated with 
restrictions imposed by the coronavirus, now we can talk about stable trends, which are primarily 
due to the strengthening of the domestic market and the strengthening of technologies and 
In addition, UZCARD LLC launched a new direction of activity of the company 
res, which were created with the aim of attracting promising start
solutions in the financial technology sector.
The main goal of UZCARD Accelerator & Ventures is to assist in the development of the fintech 
of Uzbekistan through the transfer of new technologies.
Based on certain product priorities of professional participants and non
participating in the financial technology market, we will consider the main possibilities of 
he stability and security of the national financial system (Table 6). 
The main features of fintech for the stability and security of the national financial 
system 
Characterization of an opportunity or 
I. Professional participants: 
Opportunity characteristics: fintech contributes to improving the 
technological effectiveness of financial transactions and the 
transparency of financial assets management. The banks of the 
Republic of Uzbekistan receive a motivating factor for the 
qualitative growth and development of the product portfolio for 
retail and corporate clients, taking into account the best world 
practices of organizing banking business in the digital economy. 
Future economic effects: reduction in operating costs due to the 
transition to a business model of neobanks (digital twins of 
traditional banks); increasing investment and technological 
attractiveness; reduction of regulatory risks and costs associated 
with violation of banking legislation. 
Opportunity characteristics: the development of the domestic 
fintech market is a strategic tool for implementing the import 
substitution program for high-tech products (software, infrastructure 
solutions, licenses) for organizing financial transactions, which will 
reduce the impact of foreign sanctions and trade embargoes on
national financial and banking sector of the country. Future 
economic effects: more than 63.0% of Uzbek, incl. 75.0% of "Z
youth" are ready to completely switch to the services of the so
called neobanks (fully digital banks), since their services and 
policies are more attractive to the client
11
; banks and non
businesses using fintech are able to create multi
and marketplaces available to the bank's client; stimulating business 
exhibitions_and_conferences/tsifrovizatsiya-biznesa-v-uzbekistane/
nd Stability
ISSN: 2181-2608 
www.sciencebox.uz/ 
80 
However, if at the beginning of 2020 the transition to online commerce was associated with 
rus, now we can talk about stable trends, which are primarily 
due to the strengthening of the domestic market and the strengthening of technologies and 
In addition, UZCARD LLC launched a new direction of activity of the company - UZCARD 
res, which were created with the aim of attracting promising start-up projects that develop 
The main goal of UZCARD Accelerator & Ventures is to assist in the development of the fintech 
of Uzbekistan through the transfer of new technologies. 
Based on certain product priorities of professional participants and non-financial businesses 
participating in the financial technology market, we will consider the main possibilities of 
he stability and security of the national financial system (Table 6).
The main features of fintech for the stability and security of the national financial 
Characterization of an opportunity or threat 
Opportunity characteristics: fintech contributes to improving the 
technological effectiveness of financial transactions and the 
transparency of financial assets management. The banks of the 
Republic of Uzbekistan receive a motivating factor for the 
qualitative growth and development of the product portfolio for 
retail and corporate clients, taking into account the best world 
ces of organizing banking business in the digital economy. 
Future economic effects: reduction in operating costs due to the 
transition to a business model of neobanks (digital twins of 
traditional banks); increasing investment and technological 
ess; reduction of regulatory risks and costs associated 
Opportunity characteristics: the development of the domestic 
arket is a strategic tool for implementing the import 
tech products (software, infrastructure 
solutions, licenses) for organizing financial transactions, which will 
reduce the impact of foreign sanctions and trade embargoes on the 
national financial and banking sector of the country. Future 
economic effects: more than 63.0% of Uzbek, incl. 75.0% of "Z-
youth" are ready to completely switch to the services of the so-
called neobanks (fully digital banks), since their services and 
; banks and non-financial 
businesses using fintech are able to create multi-product ecosystems 
and marketplaces available to the bank's client; stimulating business 
uzbekistane/ (data of appeal 15.11.2021) 

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Journal 
Volume: 02 Issue: 01 | 202
3. 
Improving 
the 
financial culture and 
literacy 
of 
the 
population 
At the same time, it should be understood that fintech brings not only progress for the financial 
market, but also significantly increases the challenges and threats to its sta
which is due to the following reasons: 1) for the effective functioning of fintech, personal data 
about clients and their financial transactions that are collected using the Big Data mechanism and 
the API open banking data standard;
is how they can better meet customer needs, i.e. there is a need to transfer personal data, and 
sometimes financial assets between different fintech products; 3) currently in the field of fint
there is no single standard for the security of data exchange, and each fintech actor defines its 
own rules for cyber protection of information; 4) financial technologies are one of the most 
popular targets for cyber attacks and hacking in order to ste
assets or commit fraudulent transactions on behalf of a client. Based on the above reasons for the 
formation of challenges and threats to the financial market by fintech services, let us consider the 
most topical challenges and threats to the development of fintech for the Uzbek reality (Table 7).
Table 7 The main challenges and threats for the financial market of Uzbekistan generated by 
Challenge / threat name
1. Formation of financial 
bubbles in the field of 
microcredit and P2P loans for 
commercial purposes 
2. Use of fintech services in 
money 
laundering 
and 
terrorist financing 
3. Risks of misleading the 
user in relation to the service 
provider (including the risk of 
anonymity of the service 
11
Neobanks and lifetime advisors: banking innovations in the coming decades (01/09/2020) [Electron
https://trends.rbc.ru/trends/futurology/5f4d3aa99a794781e4 b9ae68
Journal of Advanced Research and Stability 
Volume: 02 Issue: 01 | 2022
ISSN: 2181
www.
activity among SMEs as the most open to cross
collaboration and the introduction of digital business management 
technologies. 
Opportunity characteristics: the use of fintech solutions contributes 
to the development of digital competencies of the population, an 
increase in confidence in the use of digital technologies, an increase 
in the safety of behavior in a virtual environment when making 
financial transactions, as well as the formation of investment 
behavior of citizens - with higher confidence in the financial 
market, interest in investing increases. 
At the same time, it should be understood that fintech brings not only progress for the financial 
market, but also significantly increases the challenges and threats to its sta
which is due to the following reasons: 1) for the effective functioning of fintech, personal data 
about clients and their financial transactions that are collected using the Big Data mechanism and 
the API open banking data standard; 2) fintech services strive for inter-
is how they can better meet customer needs, i.e. there is a need to transfer personal data, and 
sometimes financial assets between different fintech products; 3) currently in the field of fint
there is no single standard for the security of data exchange, and each fintech actor defines its 
own rules for cyber protection of information; 4) financial technologies are one of the most 
popular targets for cyber attacks and hacking in order to steal personal information, financial 
assets or commit fraudulent transactions on behalf of a client. Based on the above reasons for the 
formation of challenges and threats to the financial market by fintech services, let us consider the 
es and threats to the development of fintech for the Uzbek reality (Table 7).
The main challenges and threats for the financial market of Uzbekistan generated by 
the development of fintech 
Challenge / threat name 
Characteristics of the challenge / threat to the financial 
market 
1. Formation of financial 
bubbles in the field of 
microcredit and P2P loans for 
Fintech services in the field of microlending and P2P loans 
use a more flexible and loyal algorithm for scoring and testing
a client's creditworthiness and are an alternative tool for 
obtaining a loan for clients with negative credit history or 
already having bad debts to the bank, at the same time, this 
creates a threat of growth of problem loans and fueling 
consumer demand with unsecured cash.
2. Use of fintech services in 
money 
laundering 
and 
Fintech services are in many ways tools for anonymous 
financial transactions (for example, unidentified e
addition, fintech in Uzbekistan is mainly dev
infrastructure for money transfers bypassing banks 
carries the risks of making money transfers to hide income 
from tax authorities and financing of prohibited activities.
3. Risks of misleading the 
user in relation to the service 
provider (including the risk of 
anonymity of the service 
Fintech services operate mainly on the infrastructure of 
telecom providers, and in the event of force majeure, 
determining the measure of responsibility of participants in 
financial transactions is problematic. In addition, a fintech 
Neobanks and lifetime advisors: banking innovations in the coming decades (01/09/2020) [Electron
https://trends.rbc.ru/trends/futurology/5f4d3aa99a794781e4 b9ae68
nd Stability
ISSN: 2181-2608 
www.sciencebox.uz/ 
81 
activity among SMEs as the most open to cross-sectoral 
collaboration and the introduction of digital business management 
Opportunity characteristics: the use of fintech solutions contributes 
mpetencies of the population, an 
increase in confidence in the use of digital technologies, an increase 
in the safety of behavior in a virtual environment when making 
financial transactions, as well as the formation of investment 
h higher confidence in the financial 
At the same time, it should be understood that fintech brings not only progress for the financial 
market, but also significantly increases the challenges and threats to its stable and safe operation, 
which is due to the following reasons: 1) for the effective functioning of fintech, personal data 
about clients and their financial transactions that are collected using the Big Data mechanism and 
-product cooperation, this 
is how they can better meet customer needs, i.e. there is a need to transfer personal data, and 
sometimes financial assets between different fintech products; 3) currently in the field of fintech 
there is no single standard for the security of data exchange, and each fintech actor defines its 
own rules for cyber protection of information; 4) financial technologies are one of the most 
al personal information, financial 
assets or commit fraudulent transactions on behalf of a client. Based on the above reasons for the 
formation of challenges and threats to the financial market by fintech services, let us consider the 
es and threats to the development of fintech for the Uzbek reality (Table 7). 
The main challenges and threats for the financial market of Uzbekistan generated by 
threat to the financial 
Fintech services in the field of microlending and P2P loans 
use a more flexible and loyal algorithm for scoring and testing 
a client's creditworthiness and are an alternative tool for 
obtaining a loan for clients with negative credit history or 
already having bad debts to the bank, at the same time, this 
creates a threat of growth of problem loans and fueling 
ith unsecured cash. 
Fintech services are in many ways tools for anonymous 
financial transactions (for example, unidentified e-wallets), in 
addition, fintech in Uzbekistan is mainly developing as an 
infrastructure for money transfers bypassing banks - all this 
carries the risks of making money transfers to hide income 
from tax authorities and financing of prohibited activities. 
Fintech services operate mainly on the infrastructure of 
telecom providers, and in the event of force majeure, 
asure of responsibility of participants in 
financial transactions is problematic. In addition, a fintech 
Neobanks and lifetime advisors: banking innovations in the coming decades (01/09/2020) [Electronic resource]. URL: 

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Journal 
Volume: 02 Issue: 01 | 202
provider)
4. Agency conflicts between