EGULATION AND SUPERVISION OF FINANCIAL SERVICES IN THE ERA OF GLOBAL DIGITALIZATION: EXPERIENCE OF AZERBAIJAN

Abstract

Abstract. The COVID-19 pandemic necessitated the urgent regulation and renewal of financial and banking services in Azerbaijan in the era of global digitalization. A number of important steps have been taken in the country, which are highlighted in the present article. First and foremost, numerous adopted legal acts, measures taken to increase the volume of non-cash payments and minimize the amount of cash payments have been analysed in the present article. It has been emphasized that strengthening of the role of banks in business financing also stimulates the economic growth as a result of the application of opportunities created by the digitalization of banks, legal entities and population. The importance to carry out reforms in the field of payments, to develop the legal framework, to strengthen institutional capacity has been examined. Next, the use of information technology and the enhancement of digital literacy have been identified as crucial issues. Moreover, digitalization is the main goal of improving risk management in banks and is defined as a strategic approach for the long term. The development of information technology and the acceleration of digital transformation in the international arena have contributed to the formation of modern and different approaches in the financial system, as well as in the operating part of banks. Furthermore, a new prudential system for responding to new challenges has been developed and the existing risk management tools based on international experience have been applied. The widespread use of mobile services over the Internet to facilitate consumer access to these services also plays a significant role in reducing costs and wasted time by creating additional capabilities. Finally, the article shows how the use of modern technological channels has increased the ability to collect and analyse more extensive and necessary information about current and potential customers. Keywords: financial system, prudential, financial authority, information technology, regulator, strategic roadmap. JEL Classification G21, O14, K20 Formulas: 0; fig.: 0; tabl.: 0; bibl.: 19.