New trends in the regulation of the banking sector: international experience and its applicability to the central asian countries

Abstract

The aim of the work was to study modern approaches to banking regulation based on the experience of developed countries (Canada, Germany, Singapore) and to determine the possibilities of the adaptation in the context of the banking system of Kyrgyzstan, taking into account the processes of digitalisation and institutional constraints. The research methodology included comparative analysis, SWOT analysis, content analysis of legal documents, statistical processing of data from the National Bank of the Kyrgyz Republic, international regulatory standards (in particular, the requirements of Basel I and II). The research produced unique data reflecting the state and dynamics of the digital transformation of the banking sector of Kyrgyzstan. It was established that from 2021 to April 2025 the number of mobile banking users increased by 35% and amounted to 1.2 million people. The example of MBank showed a high degree of integration of digital services – more than 10 million downloads of the mobile application and 3 million active clients by 2024, which constituted about 80% of the adult population of the country. The bank’s loan portfolio over the same period grew by 400% – from 7 to 35 billion soms. The results of the research showed that, despite the high level of digitalisation, the existing regulatory system in Kyrgyzstan required certain modernisation. In particular, a number of deviations from the requirements of the Basel Accords were revealed in terms of internal control, risk assessment, and corporate governance. The SWOT analysis confirmed the presence of both strengths (broad access to digital services, state support) and weaknesses (staff shortage, fragmentation of regulation). The work consisted in formulating specific recommendations for financial supervisory authorities and the banking sector of Kyrgyzstan regarding the adaptation of international regulatory practices. In particular, it was proposed to introduce independent risk committees in banks, automate scoring procedures based on Big Data, and revise the regulatory framework in accordance with the requirements of Basel III. The results obtained could be used in the development of a digital transformation strategy and the reform of banking supervision in the Central Asian countries.