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2024: The number of fintech startups in Kazakhstan has grown 4 times in 5 years. Card
The number of fintech startups in Kazakhstan has quadrupled in five years - from about 50 in 2018 to more than 200 by 2024. In addition, the fintech segment is leading in raising venture capital in the country. This is stated in a joint study by Rise Research, the National Payment Corporation of Kazakhstan, Mastercard and Tarlan Payments, the results of which were published in early July 2024.
The review notes that from 2019 to 2023, the number of active users of online banking Kazakhstan in increased 4.6 times - from 5 million to 23.1 million people. This was facilitated by technological improvements, support from regulators, market competition and an increase in penetration Internet to 92%. The share of non-cash payments as of May 2024 reached 89% in the total volume of transactions. Penetration smartphones in the country is about 83%.
The development of non-cash payments in Kazakhstan was also facilitated by the growth of e-commerce. According to PwC, in 2023, this segment accounted for 12.6% of the total retail trade in the country. The growth trend is expected to continue, which will contribute to the further digitalization of payments.
Despite the fact that banks dominate the fintech market in Kazakhstan, the number of startups in this area continues to grow. Such companies have become leaders in terms of the volume of attracted investments: in 2023 they accounted for 40% of all venture financing in Kazakhstan. In absolute terms, the volume of venture investments in fintech in the country at the end of 2023 reached approximately $32 million against $10 million in 2022 and $3 million in 2021. At the same time, banks acquire startups to strengthen their ecosystem, use existing data and attract highly qualified specialists.
The report says that by 2024, 31% of financial market participants in Kazakhstan use artificial intelligence technologies. Among the key areas of application of such solutions are fraud detection, cybersecurity, identification and personalization of services. At the same time, there is a difference in the level of AI use between different types of financial institutions. Such a picture suggests that some market segments may be more ready for innovation than others. The reason is the differences in available resources, culture of innovation and customer needs. More than a third of respondents noted that the use of AI in their organizations is at an early stage, and only 4% of survey participants approached the full implementation of such tools.
 | The fintech industry of Kazakhstan is rapidly developing due to a number of favorable factors. In 2024, as the global fintech landscape undergoes change, Kazakhstan is on the front lines of innovation thanks to robust banking infrastructure, favorable public policy and a technologically savvy population, says Suleiman Sozeri, Mastercard CEO for Central and Eastern Europe. |  |
It is also noted that the transformation of the payment landscape of Kazakhstan is due to several factors: favorable demographic indicators, growing digital maturity, increasing the volume of e-commerce, increasing the availability of banking services, infrastructure development (for example, local payment systems and QR codes), the launch of large providers of digital wallets, etc. All segments of the country's fintech market are expected to continue to show double-digit CAGR through 2027.[1]
2023: Top 6 fintech trends named in Kazakhstan
The financial technology market in Kazakhstan is one of the fastest growing in Asia, which is facilitated by the active use of digital payment services by local residents. This is stated in a study by Finextra, the results of which were released on September 6, 2023.
Analysts note that several factors contribute to the development of the fintech industry in Kazakhstan. In particular, the country benefits from a favorable business environment and reliable banking infrastructure. In addition, a high level of Internet access penetration has been achieved - more than 90%. At the same time, large organizations, including companies from the telecommunications sector, are experimenting with the development and implementation of new products and services. Overall, Finextra highlights six key fintech trends in Kazakhstan.
1. Explosive growth in digital payments and e-commerce
The rapid expansion of this sector is due to technological advances, changes in legislation, as well as increased market competition and the demand for services. According to estimates, the volume of non-cash transactions in Kazakhstan increased from $5 billion in 2017 to $158 billion in 2022. Thus, the CAGR (compound percentage CAGR) during the specified period was 98%. Companies are actively implementing POS terminals to adapt to changing consumer behavior. In 2017, 108 thousand such devices for accepting plastic cards for payment operated in the country, and in 2023 their number increased to 831 thousand.
2. Open banking
The concept provides for the use of open APIs in the financial sphere. Third-party developers are able to create services and applications for financial institutions. Open banking allows you to organize an effective exchange of data about the client with his consent and form personal offers for him. Factors such as cross-industry integration, digitalization of public services and open data initiatives are accelerating digital transformation in the financial market.
3. Ecosystem and Super Application Development
Kazakhstan has a high level of introduction of mobile banking (86%), which contributes to the development of various ecosystems. They offer a range of services through a single app, combining financial and non-bank services such as online payments, e-commerce, investment, insurance and lifestyle.
4. Digital SMBs
Kazakh companies are increasingly using digital channels to promote their products and services. At the same time, supporting information related to inventory management and customer feedback allows banks to make more informed lending decisions, thereby reducing possible risks.
5. Democratization of the capital market
Against the background of legislative changes and technological achievements in Kazakhstan, sustainable growth is demonstrated by digital trade systems and Wealthtech platforms - digital solutions that help customers manage their investments in an efficient and affordable way. Investment mobile applications have democratized access to the stock market, making it easier to organize remote cooperation through biometric identification services.
6. Digital tenge
The National Bank of Kazakhstan is actively developing digital currency: this initiative is aimed at providing a new payment option. Various methods of transactions are provided - via NFC, using QR codes, biometric data, etc. Digital tenge will be issued in the form of tokens.[2]
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