For a bank with a 150-year history and legacy as a pioneer in Azerbaijan’s financial sector, Kapital Bank continues to evolve in line with its customers’ needs. An agile mindset fosters an innovative approach that has seen it drive digital transformation in the domestic market.
Being the first-ever financial institution in Azerbaijan is not enough on its own to stand out in a crowded marketplace. Kapital Bank has also become increasingly agile in response to what customers want and need.
“It’s about being the first choice for our customers,” said Farid Huseynov, Chairman of the Board and Chief Executive Officer. “We earn their trust by striving for excellence in everything we do.”
Put simply, the bank’s competitive advantage comes from its ability to combine tradition through a 150-year history with innovation. “We have a deep understanding of the Azerbaijani market, and we’ve made significant investments in digital transformation to stay ahead,” he added.
A successful digital journey
A clear example is Birbank, Kapital Bank’s mobile banking app which is tailored to the needs of how individuals, SMEs and large corporations want to manage their finances, make payments and transfer money.
“It’s more than just a banking app,” said Huseynov. “It’s a complete digital ecosystem, designed to simplify the everyday financial needs of our customers.”
After launching in 2018, by 2021 Birbank had transformed into a fully digital bank, enabling Kapital Bank to pioneer end-to-end banking products through a mobile app within Azerbaijan.
“It was like rebuilding from scratch,” explained Huseynov. “Our mindset changed, and since 2021, we’ve continued our digital transformation, constantly evolving in line with global trends.”
Around 3 million users are testament to the experience and journey. Collectively, they have driven the digital deposit portfolio up by AZN 600 million in 2024 to date, to AZN 1.1 billion in total – growth which showcases the trust customers place in the digital banking solution.
Loyalty programmes are another feature of Kapital Bank’s customer-first approach. They have led to over AZN 156 million (US$91.8 million) in cashback, miles and bonus refunds in 2023-24, amid net profit of AZN 166 million for nine months of 2024, and assets of more than AZN 10 billion.
Making agility the norm
By prioritising agility in its operations and strategy, Kapital Bank has also built a new mindset and culture. It promotes collaboration, flexibility and continuous improvement across the organisation, encouraging teams to take ownership of their projects, adapt quickly to changes and keep customers at the centre of their decision making.
“This journey has also laid the foundation for more flexible and innovative service delivery, enhancing both customer experience and employee engagement,” said Huseynov.
Being forward thinking is reflected in automated tools that create efficiency. The bank has invested in technologies like voice-to-text and text-to-voice systems, reducing the need for many of the daily customer interactions like phone calls by solving problems before they even reach the customer, such as via advance notifications about potential risks like card blocks after suspicious transactions. Further, an artificial intelligence-integrated chatbot gives tailored responses to customers based on their behaviours and needs.
Business customers also benefit from the push to digitalise. For example, the Birbank Biznes mobile app enables SMEs to access their accounts and perform various financial transactions anytime and anywhere. For example, 99% of all non-lending operations are performed remotely, including business loans of up to AZN 100,000.
Keeping focused on its core
To further reinforce its focus on contributing positively to its home market, Huseynov said Kapital Bank doesn’t have plans at the moment to expand beyond Azerbaijan.
“There is still so much potential for growth and innovation within our country’s banking sector, and our focus remains on improving the welfare of our people through customer-centric services and increasing banking accessibility across the country,” he added.
This includes efforts to enhance the domestic digital ecosystem. A new loyalty programme is in the pipeline to offer rewards and bonuses, as are new digital services, from payment options to innovative products.
By 2026, Kapital Bank expects that over 60% of its issued loans will be processed digitally. It is also using advanced scoring models and new data sources to simplify the loan process.
These are examples of how Kapital Bank aims to implement its vision for the next five to 10 years – to further embrace change and innovation, to adapt to new technologies and evolving customer expectations. “Our commitment to digital transformation remains strong and we aim to further enhance our products and services to meet the needs of a rapidly developing financial ecosystem,” added Huseynov.
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