Asia FinTech Awards 2024: Yerbol Orynbayev

Yerbol Orynbayev, former governor of the World Bank on behalf of Kazakhstan and former deputy prime minister of Kazakhstan, is a proud judge of the Asia FinTech Awards 2024.

Yerbol Orynbayev, former governor of the World Bank on behalf of Kazakhstan and former deputy prime minister of Kazakhstan, is a proud judge of the Asia FinTech Awards 2024.

Can you share a bit about your role as deputy prime minister of Kazakhstan from 2007 and the specific initiatives you undertook to navigate the country through the financial crisis in 2008? 

Yes, I was with the government until 2015. During the financial crisis, I was one of the key officials who handled the economic crisis and addressed the many challenges we faced.  

One was the employment strategy. We found out that about 3 million people were unemployed because of the slowdown of the economy. 

We developed a strategy that had a couple of important components, such as training. It was short-term training and retraining the people in terms of the skills required by the economy.  

The government also came up with infrastructure initiatives. We invested in road construction, school refurbishment, hospital refurbishment, and these types of things.  

During your time as the governor of the World Bank on behalf of Kazakhstan, could you talk about the work you did to promote economic development? 

It was a very exciting period. It was the peak of cooperation between Kazakhstan and the World Bank.  

As Kazakhstan developed, we built our finances to such a successful extent that we could donate money to the World Bank instead of just borrowing or requesting some type of debt subsidy.  

There are two examples I would like to highlight. One is that we built a highway which goes through Kazakhstan and connects to the western part of China, the southern part of Russia, and then ends up in Eastern Europe. It was a huge project.  

We also had a joint research programme between the government and the World Bank where we discussed social and economic issues. We would brainstorm ideas, and then the World Bank provided the best possible policy advice in that field. For example, employment, financial, inflation, targeting and bank restructuring. It was very unique. 

I believe bundling traditional banking and financial services with non-financial services is the future of banking.

In your role as an independent financial services consultant, what are the key challenges and opportunities you observe in the financial sector today, and how do you advise companies to navigate through them? 

I believe bundling traditional banking and financial services with non-financial services is the future of banking. Nowadays most of the banks move in this direction. In the UK for example, all the biggest banks have already successfully built financial ecosystem models.   

In addition, customer preferences are changing. The new generation of customers is more focused on their digital products. They don’t like to go to their branches, they prefer to use smartphones, and they want 24-hour services. This also facilitates a shift in the banking landscape. Banks must innovate to be profitable.  

How has your experience in both governmental policymaking and private financial services shaped your approach to advising financial and technology companies today? 

I think my advantage is that I worked from the regulator’s perspective, and I’ve also experienced the private sector at major financial technology companies.  

From the government perspective, you are mostly preoccupied with the promotion of the competition, making sure that there are no abuses in the market, and no excessive concentration of players that might abuse it.   

It’s about how you handle monopoly and make sure that your overall financial and banking framework is sustainable, so there are no risks which can undermine the whole structure and cause a crisis.  

It’s a different story from the private market perspective, where you are usually preoccupied with how you make money, how you develop new technologies, and how you build a monopoly. This is a completely different perspective.  

My advantage is that I was on both sides, so I understand the trade-offs.  

You played a role in launching the first Western-style research university in Kazakhstan. Can you elaborate on this and the impact education has on a country’s development? 

Kazakhstan kind of ended up with a Soviet-type of education system. So when the country became independent (in 1991) it was a big question of what direction to move in.  

I’m an advocate of the Western type of education system. I believe that education enlightens people, and this is the way to progress and democracy.  

If you would like to build a sustainable democracy and a prosperous country, you should start with education. Of course, it takes some time, but this is the most sustainable way to do it from my perspective. 

Big data is the blood of the new business model.

How should regulation and innovation be balanced?  

This is a great and key question for the markets because the degree of openness and readiness to accept innovations sets regulators apart, and the degree of innovation in their market. 

Many regulators are very conservative. They are preoccupied with security and risks in the system. When something is introduced and there are changes in the status quo, it’s always a revolution in the minds of the regulators. The first reaction is to oppose them and say we don’t need it.  

The level of development in markets depends on the openness and readiness of the regulators to accept innovation. It’s very challenging. It’s a very big intellectual exercise because it comes with additional risks and you have to understand how to manage new innovations.  

A relevant example in the UK is Revolut. They have a very disruptive new ecosystem business model. They applied for a banking licence but there have been a lot of delays. My takeaway from this process is that regulators are struggling because this is a new business model and they don’t understand how to handle it, unlike with traditional banks. 

How do you see AI and big data analytics driving innovation in the banking sector, and what role do you believe they will play in the future? 

Big data is the blood of the new business model. You need AI, you need machine learning techniques, and technologies to employ this big data.  

Then there’s the science around how to do it. You have to hire engineers and data scientists. You have to hire artificial intelligence engineers who know how to build algorithms and use this data to increase productivity. This will help banks to stay competitive.  

Image: Provided

Josh Poyser Josh Poyser is an editor at FinTech Intel. He has written about fintech for several years and appeared at FinTech Connect 2023 on the 'Unlocking Success: The Art of Fintech PR' panel.