Traditional banking is passing through a transition period in bank-client relations, Tamerlan Rustamov, head of the expert group on payment systems and digital banking of the Azerbaijan Banks Association (ABA), told Trend.
According to Rustamov, this transition is characterized by the formation of digital bank-client relations, the expansion of products and services, the introduction of the latest innovations in the field of information technology.
"In the digital transformation, Azerbaijani banks are paying special attention to the development of mobile banking services in the remote building of bank-client relations,” he said. “According to ‘Innovation by domestic payment systems in the pandemic. Survival or development’ report of the World Bank, published in 2021, most (90 percent) of survey participants among the governing members of 48 organizations in 40 countries of the world consider mobile solutions as the most promising areas for innovation.”
The ABA’s representative highlighted a number of main factors that determine the need to expand the use of mobile banking.
First of all, Rustamov noted the availability of an accessible payment means and its widespread use.
"The software of mobile phones includes various functionalities, such as internet access, convenience, use of various communication methods - USSD requests, information via SMS or a call. All this has a positive effect on the use of a smartphone as an effective payment means,” he said.
“According to the International Telecommunication Union, there were 107 mobile phones for every 100 people in Azerbaijan in 2019. The widespread use of mobile phones is prompting international payment systems and financial institutions to offer their products and services via mobile phones, thereby ensuring customer satisfaction,” he added.
Another aspect of expanding the use of mobile banking, in his opinion, is the payment habits of the new generation.
He also noted that innovative services of international payment systems play an important role in the expansion of mobile payments.
"The tokenization service of Visa and MasterCard Worldwide payment companies is designed to make payment transactions more convenient and secure, to expand the use of innovative solutions through electronic payments in a contactless form and without a payment card - via mobile phones,” the group’s head said.
“Currently, International Bank of Azerbaijan OJSC and Bank Respublika OJSC use VISA services in mobile banking services, and Kapital Bank OJSC are using tokenization services of both leading international payment systems (Visa and MasterCard Worldwide),” Rustamov emphasized. “Another example of innovative projects is the integration of money transfers through the Zolotaya Korona, Contact and Khazri systems through the mobile banking service.”
Besides, he noted that the specificity of the COVID-19 pandemic period, aimed at preventing physical contact to the maximum level, gave an additional impetus to the development of remote banking services, including mobile banking, which led to the rapid growth of mobile payments.
"Against the background of this development, for various reasons, including the availability of mobile banking services, a number of business entities began to carry out non-cash payments based on card-to-card transactions, rather than through POS terminals," Rustamov said.