Prospects for the Development of the banking sector of Azerbaijan

The relevance of the problem of the banking sector development lies in the fact that banks, implementing their economic policy, can ensure continuous sustainable growth of the entire national economy. The study aims to offer long-term proposals for the development of the banking sector of Azerbaijan, which will bring it to the next level. During the research the author used such methods as the study of literary sources, analysis, synthesis, abstraction and special methods. The study presents six major macroeconomic factors that significantly affect the rate of the long-term growth of the banking sector: customer focus, legal framework, new banking technologies, cyber threats, use of the experience of large IT companies, and qualified personnel. The author analyzed the effects of these factors on the long-term growth rate. Recommendations are given on the use of innovation and advanced technologies for the benefit of development, that will allow building an efficient and competitive banking system. Based on the results of the study, the author formulated proposals for improving the banking sector of Azerbaijan that will bring it to the next level. In particular, it is proposed to optimize robotic process automation, namely, to completely revise the existing methods of work, and not just solve problems using robotization. The author concluded that there is a long way ahead towards ensuring the sustainable development of the banking sector in Azerbaijan, which is currently at the beginning of its journey. Further research on this topic will allow a deeper study of digital opportunities and prospects for the integrated implementation of innovation.

1. Srinivas V., Goradia U., Wadhwani R. Managed services: A catalyst for transformation in banking. Deloitte Insights. Mar. 22, 2017. URL: https://www2.deloitte.com/us/en/insights/industry/financial-services/managed-services-in-risk-management-and-regulatory-compliance.html

2. Hida E. Global risk management survey, 10th edition: Heightened uncertainty signals new challenges ahead. Deloitte Insights. Mar. 02, 2017. URL: https://www2.deloitte.com/us/en/insights/topics/risk-management/global-risk-management-survey.html

3. McWaters R.J., Galaski R. Beyond fintech: A pragmatic assessment of disruptive potential in financial services. Geneva: World Economic Forum; 2017. 197 p. URL: http://www3.weforum.org/docs/Beyond_Fintech_-_A_Pragmatic_Assessment_of_Disruptive_Potential_in_Financial_Services.pdf

4. Eckenrode J., Srinivas V. Disaggregating fintech: Brighter shades of disruption. New York: Deloitte Center for Financial Services; 2016. 30 p. URL: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-services/us-fsi-disaggregating-fintech-brighter-shades-of-disruption.pdf

5. Chanjaroen C. Ex-citi CEO says 30% of bank jobs at risk from technology. Bloomberg. Sept. 13, 2017. URL: https://www.bloombergquint.com/global-economics/2017/09/13/ex-citi-ceo-pandit-says-30-of-bank-jobs-at-risk-from-technology

6. Wladawsky-Berger I. As automation anxiety grows, remember we’ve been here before: Technological advancements bring new opportunities, and many of the same fears. Wall Street Journal. Sept. 01, 2017. URL: https://www.wsj.com/articles/as-automation-anxiety-grows-remember-weve-been-here-before-1504281268

7. Srinivas V. The future of automation in the banking industry: What can we learn from ATMs? Deloitte Quick Look Blog. July 19, 2017. URL: https://www2.deloitte.com/us/en/pages/financial-services/articles/automation-in-the-banking-industry.html

8. Hagel J., Schwartz J., Bersin J. Navigating the future of work: Can we point business, workers, and social institutions in the same direction? Deloitte Review. 2017;(21). URL: https://www2.deloitte.com/us/en/insights/deloitte-review/issue-21/navigating-new-forms-of-work.html

9. Schwartz J., Collins L., Stockton H., Wagner D., Walsh B. Rewriting the rules for the digital age: 2017 Deloitte global human capital trends. Colombo: Deloitte University Press; 2017. 144 p. URL: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/human-capital/hc-2017-global-human-capital-trends-us.pdf

10. Kane G. C., Palmer D., Phillips A. N., Kiron D., Buckley N. Achieving digital maturity: Adapting your company to a changing world. Cambridge: MIT Sloan Management Review; 2017. 31 p. URL: https://www2.deloitte.com/content/dam/insights/us/articles/3678_achieving-digital-maturity/DUP_ Achieving-digital-maturity.pdf

11. Bolton D. 61% of people access mobile banking on a regular basis. Applause. Feb. 01, 2017. URL: https://www.applause.com/blog/mobile-banking-adoption-rates

12. Srinivas V., Fromhart S., Goradia U. First impressions count: Improving the account opening process for Millennials and digital banking customers. Deloitte Insights. Sept. 06, 2017. URL: https://www2.deloitte.com/us/en/insights/industry/financial-services/improving-account-opening-process-in-retail-banking.html

13. Crosman P. When your teller is also your digital banker. American Banker. Sept. 21, 2017. URL: https://www.americanbanker.com/news/where-your-teller-is-also-your-digital-banker

14. Qiange Z., Xueqing J. Banks take bold step forward with face tech. China Daily. Oct. 09, 2017. URL: http://www.chinadaily.com.cn/a/201710/09/WS 5a0bf7a5a31061a738405a2b.html

15. Doyle M., Sharma R., Ross C., Sonnad V. How to flourish in an uncertain future: Open banking. London: Deloitte UK; 2017. 36 p. URL: https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/financial-services/deloitte-uk-open-banking-how-to-flourish-in-an-uncertain-future.pdf

16. Gara A. Wall Street heavyweight Goldman Sachs launches its consumer lending platform Marcus. Forbes. Oct. 13, 2016. URL: https://www.forbes.com/sites/antoinegara/2016/10/13/wall-street-heavyweight-goldman-sachs-launches-its-consumer-lending-platform-marcus/?sh=da93b74628b9

17. Arnold M. European banks to launch blockchain trade finance platform. Financial Times. June 26, 2017. URL: https://www.ft.com/content/6bb4f678-5a8c-11e7-b553-e2df1b0c3220

18. Wigglesworth R., Rennison J. Goldman expands algorithmic corporate bond trading. Financial Times. Aug. 16, 2017. URL: https://www.ft.com/content/6d15c274-70ec-11e7-aca6-c6bd07df1a3c

19. Arnold M., Noonan L. Robots enter investment banks’ trading floors. Financial Times. July 07, 2017. URL: https://www.ft.com/content/da7e3ec2-6246-11e7-8814-0ac7eb84e5f1

20. Sadigov E. Professor: The banking system is accelerating the transition to an electronic economy. UNEC News. Dec. 19, 2020. URL: http://news.unec.edu.az/ekspert-reyi/6983-professor-bankovskaya-sistema-uskoryaet-perekhod-k-elektronnoj-ekonomike (In Russ.).

21. Mammadov Z. The banking system must be restructured. UNEC News. Dec. 16, 2020. URL: http://news.unec.edu.az/ekspert-reyi/6975-bank-sistemi-yeniden-gurulmalidir (In Azerb.).