(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 6.​ The Central Bank of Azerbaijan (CBA) has introduced "Open Banking" functionality in the country's financial sector for the first time, Trend reports via the bank.

This step is part of the“Financial Sector Development Strategy for 2024-2026,” which aims to digitize financial services, promote innovative products for the local market, and increase financial inclusion.

Under the strategy's“Digital Finance” initiative, implementing the open banking approach has been identified as a strategic priority. The AMB has developed the necessary regulatory framework and technical platform, while integration with commercial banks continues.

Currently, 13 banks have fully integrated the platform: Azerbaijan International Bank (ABB), AFB Bank, Azerbaijan Industry Bank (ASB), Azer Turk Bank (ATB), Bank of Baku, Bank Respublika, Kapital Bank, TuranBank, Yapı Kredi Bank Azerbaijan, Yelo Bank, VTB Bank (Azerbaijan), Premium Bank, and Xalq Bank.

Additionally, ABB and TuranBank have launched mobile applications that allow customers to access accounts and payment data from multiple banks in one interface, with their consent.

Open banking facilitates closer integration within the banking and fintech ecosystem, accelerates digital transformation, simplifies access to financial services, and encourages competition, prompting banks and fintechs to offer more innovative and customer-focused solutions. The rollout of this approach is expected to significantly support the sustainable development of Azerbaijan's financial market.

Note that the inception of open banking was not a singular event but rather a progressive evolution, with its foundational principles tracing back to a pioneering online banking initiative in Germany during the 1980s. Nonetheless, the nomenclature "open banking" is predominantly linked to the European Union's Payment Services Directive 2 (PSD2), which was operationalized in January 2018. The implementation of PSD2 necessitated that financial institutions facilitate secure access to customer financial data for duly authorized third-party providers (TPPs), thereby establishing the groundwork for the contemporary open banking framework.

More information on the open banking approach can be found here:

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