BAKU, Azerbaijan, June 23. In today’s
increasingly digital and deeply integrated financial landscape, the
role of credit reporting systems has significantly expanded beyond
traditional scoring models, said Togrul Aliyev, Deputy Governor of
the Central Bank of Azerbaijan (CBA), Trend reports.
Speaking at the 1st International Credit Reporting Conference in
Baku, Aliyev noted that credit bureaus now stand as a key pillar of
the broader information infrastructure, including within the
banking and financial system.
The official added that from a macroprudential perspective,
credit bureaus play a vital role in reducing information
asymmetries and default probabilities in credit markets, thereby
supporting responsible lending.
“They are also crucial for macroprudential analysis, stress
testing, countercyclical policy implementation, and the development
of risk models under frameworks such as the International Financial
Reporting Standards (IFRS) and Basel principles. This, in turn,
contributes to overall financial stability.
Furthermore, it should be emphasized that credit bureaus serve
as a key instrument in promoting financial inclusion. While in the
past their role was primarily limited to improving access to
finance by compiling credit histories for individuals and
businesses and incorporating them into underwriting systems, today,
more advanced integration methods have significantly broadened
these opportunities,” he said.
Aliyev emphasized that many credit bureaus are beginning to
integrate non-traditional data sources into their systems.
“Examples include electronic payment operations, customers’
e-commerce behavior, rental and utility payment data. These
alternative sources provide new and broader opportunities for
improving credit accessibility, not only for personal loans but
also for micro, small, medium, and large business financing.
Within this context, I would also like to underscore the
increasing significance of credit bureaus in facilitating remote
financial services. The rapid acceleration of financial service
digitization in recent years has heightened the importance of
establishing business relationships and conducting financial
transactions remotely. Naturally, this shift has introduced new
challenges—particularly in verifying identities and mitigating the
associated risks,” he added.
Aliyev also underscored the importance of these developments for
the digital accessibility of financial reporting by business
entities.
“I believe that in this context, credit bureaus have the
potential to play a critical role in developing the infrastructure
for digital customer compliance measures and in strengthening the
effective implementation of know-your-customer (KYC) principles. By
integrating with existing identification and reporting databases
within e-government systems, they can deliver real-time identity
verification and authentication services, while simultaneously
offering flexible analytical tools based on the financial reporting
of business entities.”
The Central Bank official also noted that artificial
intelligence (AI)-driven models are designed to generate more
accurate forecasts by processing large and complex datasets beyond
the capabilities of traditional credit scoring systems:
“This enables a more granular segmentation of risks, faster
credit decision-making, and the incorporation of non-traditional
data into modeling processes. However, while these technologies
offer significant opportunities for the financial sector, they also
introduce new responsibilities for regulatory bodies. Although AI
enhances efficiency and inclusiveness, concerns remain regarding
model risk management and algorithmic transparency. In this regard,
we, like other regulatory authorities, are particularly interested
in the characteristics of the potential products to be discussed at
this Conference,” he said.
According to Aliyev, the role of credit bureaus continues to
expand across technological, operational, and strategic
dimensions.
“As integral participants in the broader financial technology
ecosystem, we are confident that our collaborative efforts will
enable us to address emerging challenges with confidence and fully
realize the benefits these advancements offer. In this context, the
evolution of the credit reporting system—initiated in the early
2000s with the establishment of the Credit Registry at the Central
Bank—remains a notable achievement, particularly as one of the
earliest examples in our region. Today, this progress is
successfully carried forward by the Azerbaijan Credit Bureau. The
bureau’s operations are recognized as key indicators in
international evaluations, notably in the World Bank’s ‘B-Ready’
report, which assesses the business environment of countries. As
widely acknowledged, our country has previously received high marks
in this platform, especially under the ‘depth of credit
information’ index.
As the Central Bank of Azerbaijan, we are committed to
maintaining a systematic and consistent approach to further
development in this area. I am confident that through our joint
efforts with government institutions, stakeholders in the financial
sector, the Azerbaijan Credit Bureau, and our international
partners, we will foster the creation of a more modern, secure, and
resilient financial environment,” Aliyev concluded.
Stay up-to-date with more news on Trend News
Agency’s WhatsApp channel