Kapital Bank’s path to digitalisation - World -
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Nahid Zeynalov, deputy chairman of the board and chief information officer at Azerbaijan-based lender Kapital Bank, explains the bank’s vision for its digital transformation and how state-backed technological development initiatives are benefiting the wider Azerbaijani banking sector and the country as a whole.

Nahid Zeynalov

Nahid Zeynalov, deputy chairman of the board and chief information officer, Kapital Bank

What are the key milestones in the digitalisation of Azerbaijan’s banking sector? 

Digitalisation has the potential to positively impact the development of Azerbaijan’s economy, including the country’s banking system. All digitalisation programmes in Azerbaijan are strongly supported by the state. The Strategic Road Map for the development of financial services in the Republic of Azerbaijan (including 2025 targets) and the State Program for the Expansion of Digital Payments in Azerbaijan (2018 to 2020) will boost the digital transformation of the financial industry. Thanks to this programme, we expect the expansion of non-cash payments, strengthening the financial base of banks in Azerbaijan. These processes will increase transparency in the financial sector, will improve the sector’s institutional and legal framework, and develop infrastructure for non-cash payments. 

How is your digital transformation strategy effecting Kapital Bank’s business model?
 
Digitalisation requires big investments from banks. Kapital Bank is heavily investing in the large-scale digitalisation of its services, operating processes and organisational structures. Thanks to our digital transformation strategy, we have invested a lot to increase our digital capabilities. As a result, Kapital Bank has been recognised as the most innovative and leading digital bank in Azerbaijan. 

Previously, Azerbaijan’s banking laws did not facilitate the remote registration of loans or the remote opening of bank accounts, but recent amendments in the country’s legislation should significantly help in accomplishing this goal. This transition to the digital era is of great importance to our country and Kapital Bank is taking steps to keep up with the current trends. We are transforming more than 20 core business services to support our banking operations digitally. We are also planning to launch branches with full end-to-end self-service systems, which is evidence of the improvement of digital technologies in the country as a whole, as well as within the banking sector. 

How is Kapital Bank embracing new technologies? 

Kapital Bank has been applying new technologies as part of the bank’s digital transformation process. We are actively using machine learning applications, especially predictive modelling for customer segmentation, retention and sales. Our marketing department is developing AI-based solutions for customer communications such as chatbots and email marketing. For the first time in Azerbaijan we have launched QR Code payments and QR Code ATM cash withdrawal through our BirBank mobile banking application. We introduced our BirBank application at the beginning of 2018. Currently BirBank is the most downloaded and most used mobile banking application in the country. iOS and Android operating systems recommend BirBank as the best application within the local financial market, based on the number of downloads, rate of use and positive user feedback. 
To increase customer satisfaction and further improve the quality of our services, we have introduced another innovation. Kapital Bank has joined the SWIFT gpi system, we are the first bank to do so in Azerbaijan and the South Caucasus region. SWIFT gpi has many advantages: it facilitates the tracking of international payments through the system; accelerates processes in the payments chain; improves transparency in terms of time and money spent on the payment process in the payment chain and so on. 

What are the most important developments in cybersecurity for your bank? 

Cyberattacks are one of the biggest threats facing the banking industry in the world today. Banks must strengthen their defences by improving their response and recovery capabilities. There are a broad range of modern security systems in use within our banking infrastructure. In order to provide full security, we use both technical (firewalls, scanners, monitoring systems) and non-technical (awareness trainings, policies, rules) methods. And of most importance, we are actively referring to the SWIFT CSP (Customer Security Programme) to reinforce our security measures while applying all their guidelines to increase our cyber risk awareness.

Kapital Bank, which has been in the banking sector of Azerbaijan since 1874, is the major provider of banking services and products to the state and state-owned companies and big corporations. The largest branch network in Azerbaijan gives the bank a special edge and a leading role to serve more than 3 million customers.

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