Kazakhstan is rapidly advancing in the global digital economy, driven by strategic initiatives and regulatory support, as Halyk Bank leads the way in financial technology adoption.
Kazakhstan is emerging as a significant player in the global digital economy, driven by a strategic convergence of regulatory frameworks and technological innovations through initiatives such as the Kazakhstan National Development Plan (2019-2025) and the “Digital Kazakhstan” State Program. This transformation is marked by a strong embrace of financial technologies (fintech), which have become foundational to the nation’s modernisation efforts, as noted by Nariman Mukushev, a member of the management board at Halyk Bank, in a recent report by Global Banking & Finance Review.
As the country approaches the conclusion of its national development plan, the advancements within its digital financial ecosystem are becoming increasingly apparent. Halyk Bank, Kazakhstan’s largest financial institution, has positioned itself as a key player in this digital shift, utilising its scale and legacy to foster technological adoption and innovation across the nation. This has led to a significant growth in both consumer and business engagement with digital applications for managing finances and commercial activities.
Recent macroeconomic indicators underline the depth of this transformation. Kazakhstan’s GDP is projected to increase by 4.4% in 2024, up from 3.9% in 2023, largely bolstered by a shift towards non-resource-based economic sectors and digitalisation. Notably, digital payments now account for more than half of all transactions within the country, representing a steep rise from previous years. The active user base engaging with digital finance surged from 5 million in 2019 to around 23.1 million by 2023, illustrating a 4.6-fold increase that underscores the rapid acceptance of fintech solutions.
In its recent quarterly results for 2024, Halyk Bank reported substantial growth in digital transactions. The bank’s flagship Halyk Super-App experienced a 28.2% increase in payments and transfers, reaching 252.1 million transactions. Coinciding with this rise was a 36.7% growth in transaction volumes, amounting to KZT 11.5 trillion, showcasing the growing reliability and preference for digital financial interactions among Kazakh citizens.
Kazakhstan’s geographical challenges, particularly in rural areas where traditional banking access has been limited, are being addressed through digital solutions. Halyk Bank has prioritised mobile-first innovations to connect rural populations to financial services, thereby expanding financial inclusion. This strategy aligns with global trends where emerging markets increasingly rely on mobile banking to bridge gaps in service availability.
Small and medium-sized enterprises (SMEs), which are critical to economic growth and job creation, are also reaping the benefits of this digital revolution. In the third quarter of 2024, Halyk Bank’s gross loan portfolio for SMEs expanded by 17.2%, reaching approximately KZT 1,619 billion (around USD 3.56 billion). This growth is attributed to the bank’s targeted approach in developing digital tools that cater specifically to the needs of entrepreneurs navigating the digital marketplace.
Underlying the digital transformation is a supportive regulatory framework aimed at fostering innovation while maintaining economic stability. Policymakers in Kazakhstan, recognising the potential of fintech, have worked to create an environment conducive to technology adoption that also serves broader social and economic objectives. Institutions such as the Astana International Financial Centre (AIFC) are pivotal in providing the regulatory structures necessary for attracting global partnerships while ensuring local relevance.
Looking ahead, Kazakhstan is poised to further embrace emerging technologies such as artificial intelligence, blockchain, and sustainable finance. These sectors present opportunities for the country not only to keep pace with global advancements but also to potentially lead in setting new standards within the fintech landscape.
The substantial rise in digital transactions, coupled with an expanding reach of financial tools, encapsulates the ongoing evolution of Kazakhstan’s economy. Halyk Bank exemplifies how established institutions can successfully adapt to changing contexts and leverage technological advancements to drive systemic change. As Kazakhstan continues to shape its digital ecosystem, it not only transforms its own financial landscape but also provides a potential blueprint for other emerging markets striving for a balance between tradition and modern technology.
Source: Noah Wire Services
- https://egov.kz/cms/en/digital-kazakhstan – Corroborates the ‘Digital Kazakhstan’ State Program and its role in the country’s digital transformation and economic development.
- https://www.csis.org/analysis/building-digital-public-infrastructure-lessons-learned-kazakhstan – Supports the significant growth in digital payments, the digitization of public services, and the role of the National Bank of Kazakhstan in promoting digital transformation.
- https://www.csis.org/analysis/building-digital-public-infrastructure-lessons-learned-kazakhstan – Provides details on the increase in digital transactions, the use of digital IDs, and the integration of government services through the eGov.kz platform.
- https://www.csis.org/analysis/building-digital-public-infrastructure-lessons-learned-kazakhstan – Highlights the collaboration between the government and private sector in developing digital infrastructure and promoting financial innovation and fintech ecosystems.
- https://www.oecd.org/en/publications/2023/05/improving-framework-conditions-for-the-digital-transformation-of-businesses-in-kazakhstan_c62df12f.html – Discusses the legal and regulatory conditions for the digital transformation of Kazakhstan’s economy, including improvements in framework conditions for businesses.
- https://www.oecd.org/en/publications/2023/05/improving-framework-conditions-for-the-digital-transformation-of-businesses-in-kazakhstan_c62df12f.html – Addresses the need for reliable access to broadband services, quality and affordability of networks, and digital security for businesses, aligning with the country’s digital transformation goals.
- https://www.csis.org/analysis/building-digital-public-infrastructure-lessons-learned-kazakhstan – Mentions the expansion of financial inclusion through mobile-first innovations, particularly in rural areas, and the growth of digital transactions.
- https://www.csis.org/analysis/building-digital-public-infrastructure-lessons-learned-kazakhstan – Details the significant increase in the use of digital payments and the role of the eGov platform in accessing public services, which aligns with the growth in digital finance engagement.
- https://egov.kz/cms/en/digital-kazakhstan – Explains the broader goals of the ‘Digital Kazakhstan’ program, including enhancing living standards and accelerating economic development through digital transformation.
- https://www.oecd.org/en/publications/2023/05/improving-framework-conditions-for-the-digital-transformation-of-businesses-in-kazakhstan_c62df12f.html – Highlights the importance of a supportive regulatory framework in fostering innovation and economic stability, which is crucial for the country’s digital transformation.
- https://www.csis.org/analysis/building-digital-public-infrastructure-lessons-learned-kazakhstan – Discusses the potential for Kazakhstan to lead in emerging technologies such as artificial intelligence, blockchain, and sustainable finance, aligning with the country’s future digital ambitions.
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