INTERNATIONAL
VENDORS LEADINGTHE TRANSFORMATION
IN THE BANKINGSECTOR IN UZBEKISTAN
2021-2022

Content:
1

FinTech market development in Central Asia

04

2

Government support

06

3

Factors accelerating FinTech in Uzbekistan

07

4

Competitive landcape in the banking sector of Uzbekistan

08

4.1. List of active vendors in Uzbekistan

09

4.2. Global ratings of vendors

11

4.3. List of projects in Uzbekistan

18

Methodology

20

5

FinTech Market in Central Asia
Each country lacks accurate statistics on digitalization and online transactions.

Challenges for Fintech Development:- Low Mobile phone and internet
penetration- Lack of clear FinTech developmentUZBEKISTAN

strategy and broader institutional support
for FinTech- Limited Access to finance andinvestments
Major risks arising from Fintech:- Cybersecurity risks- Currency Risks

Challenges for Fintech Development:- Unfavorable government policy- Lack of foreign investments
Major Risks arising from Fintech:- Financial Consumer Protection Risks
arising from new products and business

KAZAKHSTAN

models- Cyber security risk
- Currency risks- Data protection Risks

04

Challenges for Fintech Development:- Low Internet penetration- Small market with low maturity andlow competition

KYRGYZSTAN- Unstructured government andregulatory strategy
on digital financial services- Lack of targeted and effective
promotion of digitalchannels by financial institutions
Major risks arising from Fintech
Same as in Kazakhstan

Challenges for Fintech Development:- Poor infrastructure, monopoly of state
owned telecom providers- Uncertain business environment for
new players in the Fintech space- Small market with low maturity- Limited access to finance and

TAJIKISTAN

investments
Major risks arising from FIntech:- Cyber security risks- Currency risks05

Government support06

Factors accelerating FinTech in
Uzbekistan
Increased volume of
e-commerce after Lockdown

Financial inclusion of
unbanked population

Market demands andsupporting Infrastructure

Innovations(e-wallets, Cards)

Regulatory Issues

Recent migration from theneighboring countries due tothe military conflict

Foreign Investors

Factors delaying FinTech
Development in Uzbekistan:
Lack of strategic development for the

Mobile Access in rural parts of Uzbekistan

Fintech ( although due to recent(77% men and 62% of women own mobile

Technical assistance from international

phone)

Financial organizations, the Fintech
strategy is slowly shaping up.

Human Capital: Uzbekistan ranks 69th out of 100
countries on the Inclusive Internet Index, which

Internet Penetration: Uzbekistan ranks thelowest in the region in 4G coverage . Only
45% of the population can access 3G internet,
compared with an average of 79% in lower
middle-income countries.

assesses internet availability, affordability, relevance,and readiness of the public (e.g., skills and literacy)
to use the internet. Its weakest score (76th out of
100 countries) is in affordability (cost of access
relative to income, and level of competition in theinternet marketplace). Workers of the future require
enhanced information technology skills.

07

1. Competitive
landscape in thebanking sectorof Uzbekistan:08

Some of the active international
vendors in Uzbekistan:
VendorSolution provided
in Uzbekistan

Deals signed in
Uzbekistan

1.Finastra

Fusion Risk, Essence core andIslamic, TI Plus

Halk Bank

2.Temenos

Transact ( Islamic and Traditional module),
omnichannel and digital solutions

In negotiation

3.Oracle Financial
services ( OFSSA)

Flexcube core banking solution( Islamic
and Traditional) and front Office digitalization

In negotiation

Universalbank, Infinbank,
ApexBank ( new Bank)
Ziraat Bank
Front Office Digitalization:
Kapitalbank, National Bankof Uzbekistan, and Trustbank

4.ICFS

Islamic banking solution

TrustBank, QQB, Asia
Alliance Bank, AgroBank

5.Colvir

Traditional core banking solution

AloqaBank, Turon Bank

6.Capital Banking
Solutions CBS

Core banking solution

Davr Bank , TBC Bank

7.ITS

Video Teller Machine and partnershipwith FIDO on provision of Islamic banking
module based on a white label

AgroBank

8.CFT

Core banking, Microservice architecture

Ipoteka Bank

9.Walters Kluwer

Risk Management Solution

NA

10.Moody’s

Risk Management and TreasuryNA

11.Assecco

Call Centre, Risk Management, And
Core banking solution ( R Style)HamkorBank (R-Style),
Call Centre- Halk Bank09

12.Tieto

Card Processing Centre, Payments

LIST OF BANKS to BE
CONFIRMED

13.Avanza Solutions

Call Centre, Card Management system,
Middleware, CRM System

NA

14.OpenWay

Card processing Centre

LIST OF BANKS to BE
CONFIRMED

15.Way4

Card processing Centre

LIST OF BANKS to BE
CONFIRMED

16.CompassPlus

Card processing Centre

LIST OF BANKS to BE
CONFIRMED

17.Modefin

VendorLIST OF BANKS to BE
CONFIRMED

18.BS2

Card processing Centre

Microcreditbank, Agrobank,
OFB

19.Path Solutions

Core banking Traditional and Islamic

NA

20.CodeBase

Core banking ( Traditional and islamic)

NA

21.Azentio

Core banking, lending, and other solutions
for banking and insurance sectors

NA

22.BPC

Card processing and terminals.w

LIST OF BANKS

23.ELMA

Business Intelligence solution poweredby Power BI

PromstroyBank, Ipak Yilli
Bank, InfinBank, Anorbank.

• Please note this is not a full list of projects as most of the projects or a vendor list, as most of the information
is not announced in the market.

10

2. Global Ratings (Forrester)11

Some of the recent deals in themarket and official announcements:
Oracle FS has signed two new clients for its flagship
Flexcube core banking system in Uzbekistan. These are
Ziraat Bank and a start-up challenger bank.
Ziraat Bank, which has been in the local market for more than 25 years providing retail andcommercial banking services, has signed for a broad suite of Oracle products, including core,branch, payments treasury management, trade finance, and analytics. Ziraat Bank is a
subsidiary of Turkish banking group Ziraat and was known as Uzbek-Turkish Bank until its
rebrand in 2017.The other recent deal is with a new bank in Uzbekistan, which will provide
conventional and Islamic banking services once it launches. The bank will also implement ahost of Oracle’s solutions in addition to the Flexcube core, including risk management,
financial crime and compliance, and digital banking.There are now four Flexcube takers in
Uzbekistan – an impressive result considering Oracle FS had no business there just 18
months ago – following earlier deals with Universabank and InfinBank.Oracle FS is also
working on a trio of front-end digital banking projects there, with Kapitalbank, National Bankof Uzbekistan, and Trustbank.

12

Asia Alliance Bank becomes second ICSFS clientin Uzbekistan
21st May 2021. Uzbekistan-based Asia Alliance Bank has selected the ICS Banks
Islamic Banking solution from ICS Financial Systems (ICSFS).
Uzbekistan drafted new rules for Islamic finance in October 2020The system selection
occurred in collaboration with the Islamic Corporation for the Development of the Private
Sector (ICD).Founded in August 2009, Asia Alliance Bank carries out commercial and retailbanking in its home country.“Asia Alliance Bank will be heading towards providing its clientswith a new holistic banking exposure,” says board chairman Ikram Abdukakhorov.“We arecommitted to bring and expand our offerings by implementinginnovative and trusted businessand technology applications.”Following the deployment of the new Islamic banking solution,
the lender will deploy a seriesof Shariah-complaint products. These include Murabaha, Ijarah,
Mudaraba, Musharka, and Islamic trade finance.The ICSFS deal with Asia Alliance Bank
comes on the heels of a similar agreement signedwith Trustbank at the start of the month. The
Trustbank deal also saw support from the ICD.Uzbekistan first drafted rules for Islamic
finance in October 2020.The majority Muslim nation has sought to attract fresh investment willallow localcompanies to issue sukuk domestically and abroad.Weal Malkawi, ICSFS
executive director, says the addition of its Islamic banking solutions to universal banks
displays the platform’s abilities.“Although we are living in a very challenging times due to thepandemic, ICSFS’sstrong and solid reputation is paving its way into new regions.”
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Uzbekistan’s Trustbank plans Islamic banking firstwith ICSFS

7th May 2021 Uzbekistan-based Trustbank has selected ICSFS and its ICS Banks
Islamic banking software.
ICSFS calls the deal a “breakthrough” in Uzbekistan
The deal is hailed by both firms as the first Islamic banking revamp of its kind in the Central
Asian country.
Trustbank, founded in 1994 as Private Joint-Stock Bank, provides what it calls a “full range ofbanking products and services”.
This includes private and corporate banking, settlements, and retail deposits.
The ICSFS system is deploying across several Islamic products at the lender, including
Murabaha, Ijarah, Mudaraba, and Musharaka.
Trustbank completed its selection in cooperation with the country’s Islamic Corporation for theDevelopment of the Private Sector (ICD).
“We strive [to become] the best in providing high quality modern banking services,” says
Sardor Normukhamedov, Trustbank’s chairman of the board.
“With this new joint milestone with ICSFS […] we are creating history”.
Weal Malkawi, ICSFS executive director, adds: “We are very happy to be part of this breakthrough to see Islamic Banking kick-off in Uzbekistan.
“I would like to thank the bank and ICD, as without them we couldn’t have reached this historical milestone. It takes courage to be the first bank in Uzbekistan to lead in launching Islamic
Banking”.
ICSFS’ latest wins have come in Iraq. It has signed two new clients there in the past 12
months: First Iraqi Bank and Al Wifaq International Bank.

14

Kazakhstan’s ecommerce banking app Kaspi
quietly expands in CIS region
18th June 2020 Kaspi.kz, the ecommerce banking app which holds a 65% market
share of digital payments in Kazakhstan, is expanding its offering into neighbouringcommonwealth independent states (CIS) – starting with Azerbaijan.
Describing Kaspi as a mix between Alibaba’s ecommerce offering, Ant Financial’s payments
platforms, and WeChat’s social peer-to-peer (P2P) payments platform, managing director
David Ferguson tells FinTech Futures that the fintech has been able to build scale “in a region
which has gone under the radar”.

Goldman Sachs holds a 4% stake in Kaspi“If you can take this mobile ecosystem and be one of the first, you can create a very valuablebusiness whilst everyone else chases India and Brazil,” says Ferguson.Having alreadylaunched its marketplace in Azerbaijan, the fintech is now considering the launch of its payment services in the region, before finally rolling out its lending capabilities. Azerbaijan has apopulation of 9.98 million, whilst Kazakhstan houses a larger 18.28 million people.Eventually,
the fintech will expand into other markets – currently it is also considering Uzbekistan, which
has a population of 33 million. Kaspi, which is 4% owned by Goldman Sachs, serves eight
million users in its home market. The initial hook was payments, allowing users to pay P2P toboth friends and small businesses, pay bills, and send gift payments. But overtime, the app
has fleshed out its offering, morphing into the ‘super app’ term many fintechs across the world15

aspire to be.It lets users log onto their tax accounts through the app, plug in meter readings
for bills, and purchase items – be that household appliances or loans – through its marketplace, with the option of paying in instalments like Klarna except without the interest.“Things
like direct debits don’t exist in Kazakhstan,” says Ferguson. “What is happening in Kazakstan
is exactly what happened in China,” he adds, highlighting the shift from cash to digital that has
seen digital payments reach 30% of transactions – up from around 10% in just over two years.

Ferguson says the fintech holds a 45% share of
Kazakhstan’s entire ecommerce market
Last year, Kaspi made a $515 million profit. Whilst $74 million of this was through its
marketplace, $369 million came from its fintech platform, and another $73 million came fromits payments business.Whilst payments have not made the company the most money, they
have helped drive Kaspi’s user base growth. These users are tapping its more lucrative
services, like its buy now, pay later financing which it offers alongside its
marketplace.Ferguson says the company holds a 45% share of Kazakhstan’s entire
ecommerce market, towering over competitor AliExpress which holds just a 15% share.

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Uzbekistan's Based Halk Bank chooses Finastra's
Fusion Risk
22 May 2020, Halk Bank (People's Bank ) in Uzbekistan, is one of the biggest State ownedbanks in Uzbekistan choses Finastra's Fusion Risk Solution to transform Risk
Transformation. The Risk Management transfroamtion is managed by FinExtra, a local
Finastra's partner in Uzbekistan.
About the product:
Halk Bank selected Finastra's FusionRisk, an integrated solution for managing risk, liquidity
and profitability, as the cornerstone of a new approach to risk management in Uzbekistan. The
bank teamed up with Finastra implementation partner FinExtra to deploy the solution. Halk
Bank will use the proven MAPS (Misys Application and Process Solutions) method to ensure
rapid implementation of the Finastra FusionRisk Balance Sheet Management and Regulation
modules. Halk Bank will work with FinExtra to connect FusionRisk to its core banking systemand other internal sources using the Finastra FusionFabric Connect integration tool, whichenables easy and accurate online data capture from all source systems. With FusionRisk inplace, the bank will be able to assess and analyse market, credit and liquidity risk from asingle point of control. Teams can manage liquidity coverage ratios, regulatory capital andstress tests, and make use of up-to-date risk figures, analysis and optimisation tools—helping
them to better understand and manage risk. By enabling Halk Bank to more accurately
analyse and manage its risk, FusionRisk will make it easier for the bank to anticipate potential
threats, identify key opportunities, and optimise returns
About Support:
FinExtra will provide the support and implementation services and intergation with the corebanking system at Halk Bank.
FinExtra is commited to develop and shape banking and financial services industry in
Uzbekistan by partnership with the best global vendors.

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List of projects in Uzbekistan

1. Aloqabank: Integrated Core banking solution by Kazakhstan based vendor- Colvir. The objectives of the
project to replace current local core banking solutions FIDO and integrate directly with external government

systems without leaving any chance to their current core banking provider to even stay as an integration middleware like it was done by TBC bank when integrating Capital Banking solutions ( CBS) with FIDO ( which wasused as a middleware or as a “reporting engine”)

2. Halk Bank: Implemented a first ever Risk management system choosing Fusion Risk solution from a world
leading fintech company Finastra( previously known as Misys). The project consisted of implementing Asset andLiability management and IFRS9 modules. Fund transfer pricing was not initiated due to the changes in the teamand objectives of the bank.Halk bank was also planning to introduce new HRM system and Islamic window as
they have signed the transformation with ICD but the project got on hold due to the changes of objectives.

3. Universal Bank chose Oracle Financial Services as a core banking provider. The project has been initiatedearly 2022 and currently ongoing. The objectives to replace fully their current local core banking solution throughthe available APIs and middleware’s that the team has already developed in the past , before initiating the corebanking implementation. Before signing with Oracle, Universal bank hired consulting company Expera to implement risk management Analytics and associated business processes.

4. Apex Bank ( To be launched soon): new bank is now emerging and looking to build a fully fledged Islamic bankonce the regulation is ready to adopt and service the market. Apex bank has chosen Oracle financial services
for their new bank launch justifying the decision of having all products (including enterprise accounting) from asingle vendor. The biggest vendors such as Temenos and Finastra, and some smaller once such as ICFS, ITS
have been competition in the vendor selection process.

5. Davr Bank is still implementing Capital Banking solutions. To provide the details on their current status: ….

6. Trustbank is looking to tap into the Islamic financing introducing Islamic banking windows with the help of ICD
and the chosen Software vendor ICFS. The vendor selection was managed by ICS and TrustBank team andincluded: Oracle, ITS, Path Solutions and ICFS where the latter won due to the best pricing.

18

7. TuronBank: Has attracted international consultants for the core banking selection where Colvir seems to be infavor . The deal is yet to be announced and the transformation to be kicked in. The IFC Consultants are now
leading the digitalization transformation with the objective to assist Turon Bank in Privatization by 2025

8. AgroBank: preparing for the core banking transformation although other areas are actively developing such as

Underwriting, collection, and risk management. Agrobank hired a number of international experts to manage thecredit risk at the bank. The bank is working on its branding (change of logo), introduction of AgroTraining fordehkans and providing agro related loans to the SMEs.Agrobank has chosen ICFS with the guidance of ICD to
introduce Islamic banking window

9. Ipak Yulli Bank is making investments into the corporate banking with the guidance and assistance of EBRD.
The Trade finance adoption is important to the bank and they are currently approaching the selection process ofsome global trade finance solutions providers. Among the participants we see largest brands such as Finastra
with it’s Trade Innovation Plus and Temenos, the biggest finastra rival but not in the Trade finance space…

10. Asia Alliance bank: Chose ICFS for their journey to introduce Islamic banking windows

11. QQB- chose ICFS benefiting from a great discount by the vendor and with the great support of ICD

12. Ipoteka bank has chosen Russian CFT for their core banking implementation and micro services adoption.

Ipoteka is currently using ASBT and the risk of current core banking provider to “disappear” is high. The initiationof this project has been guided by IFC

13. Microcredit bank: digital front end/mobile banking application

14. Asaka Bank: Large consulting transformation for digitalization performed by Expera which includes Risk
management, trade finance, and other business processes. Implementation of the Enterprise solution by SAP

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15. NBU Bank: has recently downgraded their Swiss based GL Globus ( by Temenos) to a local Fido. While allbanks are trying to replace local ABS system, NBU, the largest bank in Uzbekistan implemented Fido to support
day to day operations.NBU has also hired transformation consultant for their digitalization journey from Expera

16. OFB: Planning their core banking transformation journey starting with the adoption of conventional bank andthen introducing islamic banking window ( islamic module). Currently we see Temenos competing with Oracle
Financial Services for the deal. The winner is yet to be announced as of June 2022.

17. Two more banks are planning to emerge and one Tajik bank has just received the licence, while the structure

is evolving and software providers are invited to participate.

Methodology
The Fintech Association of Uzbekistan is committed to developing the fintech ecosystem bymobilising entrepreneurs, investment and industry knowledge. Above all else, we are here to
be the voice of the Uzbekistan fintech community. A fundamental part of our commitment isto deliver comprehensive, focused, prescient thought leadership. This research project wasundertaken to provide an independent snapshot of the fintech startup sector up to Q3 2022,
characterising existing challenges and looking out for the future of the sector. While theresearch synthesises the views of over 40 startup founders, it is not an exhaustive coverageof nationwide startups but takes a systematic stakeholder approach to provide a comprehensive perspective of the ecosystem. This report aims to be a primary resource for all stakeholder groups in the market, including organisations or individuals outside of Uzbekistan who are
already working or interested in participating in Uzbekistan’s fintech startup ecosystem. It
serves to:• provide an overview of the landscape of the current fintech startup sector for potential corporate, institutional or individual investors.
• identify and compile main challenges and existing support resources in the ecosystem.
• catalyse constructive discourse by providing recommendations to enable more systematic
approaches by all stakeholders to develop the digital economy. We hope that the data,
insights, and analytics provided in this report give you a thorough outlook for fintech andbanking projects in Uzbekistan.

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International vendors leading
the transformation in the banking
sector in Uzbekistan 2021-2022© Fintech Association

2022