Financial Crime World

Here is the rewritten article in Markdown format:

Kazakhstan’s Fintech Sector Grows Rapidly Amid Regulatory Support

Astana, Kazakhstan - The fintech industry in Kazakhstan is experiencing rapid growth, driven by increasing adoption of digital payments, super-apps, and other financial services.

Report Highlights Growth

According to a new report by Fintech Consult, MOST Ventures, and RISE, the sector’s growth is being fueled by government initiatives, infrastructure enhancements, and consumer demand. The report highlights that:

  • Digital transactions in Kazakhstan have grown significantly since 2017, with cashless transactions increasing from $5 billion to $158 billion in 2022.
  • The number of point-of-sale (POS) devices has also risen dramatically, from 108,000 in 2017 to 831,000 in 2023.

Several trends are driving this growth, including:

  • E-commerce and new infrastructure solutions: Launched by the National Bank of Kazakhstan (NBK), these solutions have increased adoption of digital payments.
  • Fintech ecosystems and super-apps: Kaspi.kz, one of the pioneers in the field since 2014, has seen its customer base grow to 12.6 million monthly active users, representing about 65% of Kazakhstan’s total population.

Key Players

Some key players driving growth include:

  • Kaspi.kz: A fintech pioneer with a customer base of 12.6 million monthly active users.
  • Halyk Bank: Actively developing and deploying its own fintech ecosystems and super-apps, offering standard banking products, lifestyle services, and more.

Wealthtech and Digital Trading Platforms

Wealthtech and digital trading platforms have also recorded sustained growth over the past few years, driven by:

  • Legislative changes: Improving regulatory frameworks for fintech companies.
  • Technological advancements: Advancements in mobile investment apps, making stock trading more accessible and user-friendly.

Buy Now, Pay Later (BNPL)

Buy now, pay later (BNPL) is another fintech trend gaining traction in Kazakhstan. Kaspi.kz was one of the first players to offer this service, with other companies following suit.

Government Initiatives

Conducive government initiatives have played a crucial role in fostering innovation and digital reforms. The National Bank of Kazakhstan has outlined its vision for the future of financial services, aiming to develop a sustainable digital financial ecosystem. To achieve this goal, the central bank is implementing infrastructure solutions intended to:

  • Enhance financial stability
  • Offer a level playing field for all industry participants
  • Develop healthy competition

Retail Central Bank Digital Currency (CBDC)

The National Bank of Kazakhstan is also working on a retail CBDC, the Digital Tenge, which will be piloted with consumers and merchants this year. The CBDC will use an open-source distributed ledger and support payment options including:

  • NFC
  • QR code payments
  • Biometrics
  • Offline payments

Conclusion

According to the report, Kazakhstan is currently home to over 150 fintech companies, with payments, transfers, and mobile wallets being the largest vertical. Fintech accounted for 12% of all venture capital deals in Kazakhstan between 2018-2022, making it the second-largest sector in the country by deal count after marketplace and e-commerce. The report concludes that Kazakhstan’s fintech sector is poised for continued growth, driven by government support, infrastructure enhancements, and consumer demand.