How BS/2 is Involved in Uzbekistan’s Banking Digital Transformation

The banking sector of Uzbekistan is confidently transitioning to digital. Trust in electronic banking services among the population is growing. Consequently, the demand for cashless payments fosters the development of e-commerce platforms, payment applications, and fintech startups. The ‘Digital Uzbekistan’ International Forum in Tashkent highlighted the government’s and commercial institutions’ commitment to integrating advanced technologies in the financial sector. This year, over 2,600 people applied to participate in the event. Over 80 companies from 35 countries, including Lithuania, Poland, Spain, Austria, the UK, the USA, France, Switzerland, China, Cyprus, the UAE, and Japan, showcased their products and services.

BS/2, as a member of the Penki Kontinentai Group, was the main sponsor of the ‘Digital Uzbekistan’ Forum. The company presented its new generation of software solutions: Payments.iQᴺᴳ, ATMeye.iQᴺᴳ, Cash Management.iQ, TransLink.iQ, and DS Center.iQ. The Lithuanian vendor also displayed modern banking equipment from leading manufacturers: Diebold Nixdorf, SUNMI, Sargent & Greenleaf, Magner International, Bankosa, Henkovac, and Oberthur security equipment.

Every Third Self-Service Device in Uzbekistan is Multifunctional

Over 130 experts from the banking and payment sectors spoke at the Tashkent forum. Participants discussed the future of digital services and shared experiences integrating physical and digital channels (phygital).

The introduction of multifunctional self-service devices (Smart ATMs) in Uzbekistan has significantly transformed business processes. Modern ATMs offer various services, including cash deposits, withdrawals, and currency exchange.

Currently, 33% of all ATMs in Uzbekistan are multifunctional recyclers. This number is expected to grow significantly by the end of 2024.

AICB ‘Ipak Yuli’ was the first bank in Central Asia to adopt multifunctional ATMs. The financial company has 850 Diebold Nixdorf self-service devices and is implementing the Smart ATM project in collaboration with BS/2.

At the ‘Digital Uzbekistan’ forum, Kirill Ovsiannikov, BS/2 Deputy General Director for Strategic Development, and Umid Xojibekov, Head of Current Operations and Retail Business Control Department of AICB ‘Ipak Yuli’, shared the results of their seven-year cooperation.

The speakers explained how modern self-service devices increase transaction income and enhance customer service.

Kirill Ovsiannikov, BS/2 Deputy General Director for Strategic Development:

Banks are not only focused on new functions of ATMs and serving a large customer base but also on the payback period of self-service banking channel. It is crucial for our partners to determine the return on investment in the ATM fleet. Currently, we have set a target payback period of 24-28 months. Our partners confirm the feasibility of these terms, which is encouraging. Investments that pay off in less than 3-5 years are considered successful from a business perspective. We are confident that Uzbekistan’s banking sector will continue to develop, making banking services more accessible to the citizens.

AICB ‘Ipak Yuli’ was the first in the country to implement Vynamic View, a comprehensive ATM management platform, and ATMeye.iQ, a system for monitoring and dispute resolution. In 2022, the bank launched a Cash Management.iQ pilot project to optimize cash circulation.

AICB ‘Ipak Yuli’ plans to increase its total number of ATMs to one thousand within a few years as part of its long-term development strategy. BS/2, as a technology partner, is involved in expanding automated currency exchange points (FCX.iQ), cardless cash withdrawals (QR-Pay), account crediting, and more.

The financial institution is a client-oriented retail bank, focusing on small and medium-sized businesses. Therefore, the organization strives to provide customers with additional services and facilities that meet their needs and expectations.

Vitalii Korchevyi, Partner Sales Manager at Diebold Nixdorf:

The market in Uzbekistan has been developing rapidly, especially in recent years. Diebold Nixdorf devices, particularly ATM recyclers that provide both cash in and cash out functions are highly popular in the country. Combined with BS/2 software solutions, these Smart ATMs create a powerful combination.
The Penki Kontinentai Group team did an excellent job at the forum. Our booth attracted representatives from various banks, including top management and department heads. The exhibition was particularly important for technical staff to see the devices from the inside and confirm its reliability. For banks that haven’t used our solutions yet, the forum was a great opportunity to learn about the advantages of our hardware and software.
At the event, we showcased an ATM from JSCB ‘Kapitalbank’, which was available for real operations, including currency exchange and cash withdrawal. In my opinion, this hands-on approach is the best way to demonstrate the product. Customers can personally experience the functions and features, allowing them to see how the product integrates into their business processes.

Denis Kokhaev, Head of the Business Technical Support Department at JSCB ‘Kapitalbank’, also spoke at the forum. He discussed modern ATMs in Kapitalbank’s structure and their integration into the bank’s digital ecosystem.

In 2023, JSCB ‘Kapitalbank’ and BS/2 signed a Memorandum of Strategic Partnership. The bank agreed to acquire 750 Smart ATMs as part of this cooperation.

These devices are equipped with the latest BS/2 software. The Payments.iQᴺᴳ solution, along with FCX.iQ, QR-Pay modules, and VCP-Lite from Diebold Nixdorf enable customers to perform various ATM transactions, including:

• Loan repayments
• Withdrawal and deposit of funds
• Payment of utilities and fines
• Currency exchange

Before the forum, JSCB ‘Kapitalbank’ unveiled a new ATM function: cash-backed loan repayments. Credit services are in high demand in Uzbekistan. Although the bank offers mobile loan repayment, 40% of all loan payments are still made in cash. Introducing this service to ATMs reduces queues and eases bank branches.

Customers Can Perform Up to 80% of Their Transactions Without Visiting a Bank Branch

At the Digital Uzbekistan forum, BS/2 specialists demonstrated the Payments.iQ New Generation platform. They highlighted a self-encashment feature for legal entities via ATMs. Additionally, Payments.iQᴺᴳ now offers ATM Mobile Control and biometric technology integration.

Soon, Payments.iQᴺᴳ will be compatible with ATMs, smartphones, self-service kiosks, and cash acceptance devices. Self-encashment for legal entities, a popular service in Uzbekistan, allows customers to deposit cash into their accounts via ATMs. The funds are instantly credited and available for immediate use.

Payments.iQᴺᴳ provides cash withdrawal at ATMs via QR code for individual users, eliminating the need to use a bank card. This solution reduces commission costs and operating expenses for financial institutions, such as equipment wear and tear.

By utilizing multifunctional devices, banks can redirect customers to self-service channels. This enables customers to perform up to 80% of their transactions independently, reducing the need to visit a bank branch. Implementing the Payments.iQᴺᴳ system significantly decreases branch workloads and frees up employees for other tasks.

Another bank in Uzbekistan is implementing the updated functionality of the Payments.iQ platform. At the forum, Idrakas Dadašovas, Chairman of the Board of Penki Kontinentai Group, and Ziyovuddin Kurganov, Deputy Chairman of the Board of PJSB ‘Trastbank’, signed a Memorandum of Strategic Partnership.

The joint plan of PJSB ‘Trаstbank’ and BS/2 includes expanding the ATM network and launching new functions on self-service devices, including self-encashment. By the end of 2024, Trastbank’s ATMs will be able to accept proceeds from SME customers.

New Cash Management Capabilities in Uzbekistan

At the event in Uzbekistan, BS/2 presented an updated version of the Cash Management.iQ 2.2.5 software. The release included the new ‘Cash Handling’ module. This functionality integrates the Cash Management.iQ system with counting and sorting equipment from Magner International, Bankosa, and others.

Using advanced technologies, each connected counting machine can automatically transmit information to the bank about the quantity and status of processed banknotes. The DS Center.iQ decision support system analyzes this data, providing important insights into cash status, equipment efficiency, and the need for maintenance or banknote replacement.

Nikolajs Želnins, Head of Market Development in Uzbekistan, BS/2:

The latest trend in the banking sector is the introduction of additional functionality on self-service devices. In Uzbekistan, many banks still have ATMs that only fulfill cash withdrawal functions. However, there is a growing tendency among commercial banks to develop new ATM services, including recycling technologies. Based on our solutions, we offer banks the ability to expand their equipment capabilities and have seen positive responses from partners.

In our new Tashkent office, we have equipped a showroom displaying Smart ATMs and models of counting and sorting equipment. Banks and retailers are striving to organize efficient cash flow management, including self-service checkouts and solutions for monitoring and optimizing cash flow. Although we are at the beginning of this journey, we see significant interest and understanding of how these solutions can benefit banks.

ASHBURN International, a member of the Penki Kontinentai Group, presented various models of SUNMI payment devices at the Digital Uzbekistan forum. These included the new SUNMI P3, SUNMI P3 Mix, and the well-known SUNMI P2 and SUNMI P2 Lite SE.

SUNMI, a strategic partner of Penki Kontinentai Group, is developing the BIoT (Business Internet of Things) strategy, which integrates IoT technologies into business processes.

Together, partners aim to provide retailers with efficient and innovative solutions.

ASHBURN International’s software product, the TransLink.iQ system, offers comprehensive payment terminal network management, including real-time transaction monitoring. The software is easily scalable to meet growing business needs, ensuring uninterrupted terminal network operation, regardless of the number of connected terminals or transaction volume.

Another development, the ‘3-in-1’ solution, transforms EFTPOS devices running Android into full-fledged cash registers with payment functions and online fiscalization capabilities.

Currently, more than 30 banks in Uzbekistan use terminals with ASHBURN International software.

ASA: The Number of Physical Attacks on ATMs Worldwide Has Increased by 165%

According to the ATM Security Association (ASA), the frequency of attempted ATM break-ins and thefts has surpassed cyberattacks in 2024. Experts note these are often low-tech methods, such as using front-end loaders stolen from local construction sites.

A wide range of innovative products to protect self-service devices was presented at the forum in Tashkent. BS/2 showcased an updated version of ATMeye.iQᴺᴳ 1.8.0, which includes integration with Teltonika GPS trackers. This system allows banks to track the real-time location of their devices and quickly respond to external influences by connecting additional sensors – shock, drilling, gas, temperature, and more. Even if the ATM is disconnected from power or the mobile network, GPS trackers continue to send notifications about the ATM’s location.

Sargent & Greenleaf (S&G) showcased its products at the BS/2 stand. The manufacturer of electronic locks with one-time access codes has partnered with Penki Kontinentai Group for over five years. Globally, the use of S&G A-Series locks is becoming standard. For example, the Reserve Bank of India mandates electronic locking devices for all ATMs in the country.

Sargent & Greenleaf locks integrate with the Cash Management.iQ system, automating the generation and distribution of unique codes to unlock safes. This approach enhances security and simplifies access management for valuable assets. To date, S&G locks have been installed on over 589,000 devices worldwide.

Additionally, Oberthur Cash Protection solutions for self-service device cash protection were presented. The Oberthur Cash Protection product line includes lightweight, robust containers for transporting banknotes, safe deposit boxes for valuables, and cash coloring systems inside cassettes. Oberthur’s IBNS (Intelligent Banknote Neutralisation System) concept automatically marks banknotes with indelible ink in the event of ATM tampering, significantly reducing theft frequency as marked banknotes become unusable. Uzbekistan is among the countries where the IBNS system is authorized.

Cash handling and security solutions in Uzbekistan were detailed at the ‘ATM & Cash Optimization’ seminar organized by BS/2, held immediately after the Digital Uzbekistan forum.

Despite the gradual transition to electronic payment methods, cash remains crucial in the local economy.

The advanced technologies presented at the events in Uzbekistan will enable financial organizations to significantly enhance security, optimize cash circulation processes, and provide reliable customer service.

We invite you to explore our new-generation software solutions and discuss their implementation in your business processes. Contact us via the feedback form for more information.