American Journal of Business Management, Economics and Banking ISSN (E): 2832-8078 Volume 42, November - 2025 P a g e | 10 www.americanjournal.org DEVELOPMENT TRENDS OF DIGITAL ECONOMY AND FINANCIAL INCLUSION IN UZBEKISTAN’S BANKING SYSTEM Erkinova Feruza Najmitdinovna PhD, Banking and Finance Academy E-mail: feruzaxon2025@mail.ru A B S T R A C T K E Y W O R D S The article analyzes the development trends of digital economy and financial inclusion in Uzbekistan’s banking system from 2020 to 2025. Using statistical, comparative, and SWOD analysis, the study demonstrates the growth of digital services, mobile payments, online banking, and financial literacy programs. The social impact of digital finance, including access to banking services for rural populations, women, and youth, is also discussed. The article provides recommendations for adopting Reg Tech and AI technologies, improving financial literacy, and enhancing cybersecurity. Digital economy, financial inclusion, banking system, mobile banking, online banking, Reg Tech, cybersecurity. Introduction In recent years, the gradual implementation of the Digital Economy Concept in the Republic of Uzbekistan has created new opportunities for the transformation of the financial sector, particularly the banking system. The expansion of digital financial service infrastructure and the development of areas such as Open banking, Fin Tech play an important role in strengthening the stability of the national economic system. At the core of the digital economy lie human capital, data, and innovative technologies, while the banking system serves as a key driver of these processes. According to data from the Central Bank of Uzbekistan, as of 2025, 87% of active banking clients use digital services - an increase of 2.4 times compared to 2020.Alongside the development of the digital economy, issues of financial inclusion have become increasingly relevant. The term “digital economy «refers to enhancing economic efficiency through technological innovation, while “financial inclusion” means expanding access to financial services for individuals and businesses. Over the past few years, Uzbekistan’s banking system has carried out a series of reforms aimed at expanding digital services improving financial inclusion in Uzbekistan’s banking system in 2025. American Journal of Business Management, Economics and Banking Volume 42 November- 2025 P a g e | 11 www.americanjournal.org Table 1 Analysis of Digital banking service Development Type of Banking Service 2022 2025 Mobile and Internet Banking 4 million users 8 million users Electronic Payment Systems Pay Me, Click, Upay Uzum, wireless terminals, internal banking apps and system integrations FinTech Integration Cooperation between startups and banks for innovative services AI-based credit scoring algorithms and digital identification services In 2025, the following digital services have been actively developing within Uzbekistan’s banking system: - Banks im to reduce costs and enhance customer convenience through. - Expansion of digital services. - Financial Inclusion Trends The level of financial inclusion in 2025 is characterized by the following features: - Assess to financial services: While 35% of the population actively used financial services in 2022, this figure is expected to reach 55-60% in 2025. - Urban-rural gap: Mobile banking and agent banking services are being introduced to improve access in rural areas. - Woman and youth segments: Financial inclusion programs are expanding among women and young people aged 18-30, particularly through online microloans and savings services. - Global context: Worldwide, significant progress has been achieved in expanding formal financial assess, with digital technologies accelerating this process. - Beyond account ownership: True inclusion involves the active and purposeful use of financial services (savings, loans, payments) that contribute to financial stability. - Challenges: Security concerns, personal data protection, and low levels of digital literacy still pose obstacles. - Policy importance: Effective action requires comprehensive measures involving policy reform, financial education, innovation, and inclusion of all social groups. - The Relationship Between the Digital Economy and Financial Inclusion The analysis shows that digital banking services have become a kay tool for enhancing financial inclusion. The digital transformation of banks yields several outcomes: - Increased speed and convenience of financial services. - More effective use of electronic payment and credit systems by SMEs - Higher transparency and security levels in the banking sector. Trends in 2025. In 2025, the following trends are observed in Uzbekistan’s banking system: - Growth in digital service volume: An increase in transaction volume and the number of users. - Fin Tech innovations: Widespread adoption of artificial intelligence, blockchain, and digital identification systems. - Enhanced financial inclusion: Improved access to financial services for rural and socially vulnerable groups. American Journal of Business Management, Economics and Banking Volume 42 November- 2025 P a g e | 12 www.americanjournal.org - Regulatory improvements: The Central Bank is developing new legal frameworks to regulate digital banking and FinTech services. Table 2Number of Digital Banking Users in Uzbekistan (2020-2025) Year Number of Users(mil) Growth% Digital Share % 2020 5.4 - 36 2021 6.8 +25 45 2022 8.9 +30.8 58 2023 10.4 +16.8 69 2024 12.1 +16.3 78 2025 13.0 +7.4 87 Source: Central Bank of the Republic of Uzbekistan, Q12025(cbu.uz) Table 3 Dynamics of Mobile Payment Growth (trillion UZS) Year Mobile Payment Volume Growth Rate % 2020 49.2 - 2021 82.5 67.6 2022 121.7 47.4 2023 174 43.0 2024 233.5 34.2 2025 297.6 27.4 Table 4 Share of Digital Services in the banking System Indicator 2020 2023 2025 Internet banking 34% 58% 76% Mobil banking 41% 72% 88% Online Lending 9% 21% 33% Digital Cards 16% 38% 61% The digital economy and financial inclusion in Uzbekistan’s banking system have entered a stage of stable growth over the past five years, largely due to the “Digital Transformation-2030” Strategy of the Central Bank. - The share of digital banking services has reached 87% - The volume of mobile payments has increased six-fold. - The number of internet banking users exceeds 13 million. The Role of Reg Tech in the Banking System. The development of digital infrastructure ensures not only convenience but also economic efficiency. Reg Tech functions include: - Financial monitoring and reporting: Automated collection and submission of regulator-required data. American Journal of Business Management, Economics and Banking Volume 42 November- 2025 P a g e | 13 www.americanjournal.org - KYS (Know Your Customer) and AML (Anti-Money Laundering): Identification of clients and prevention of illegal transactions. - Risk management: Real-time analysis of credit, liquidity, and operational risks. - Compliance automation: Streamlined integral audit and regulatory compliance processes. Advantages include: - Reduction of errors. - Lower labor costs. - Faster and more accurate date preparation. - Transparent and efficient communication with regulators. Uzbekistan’s banks are recommended to expand the use of Reg Tech, AML, and Customer identification processes to strengthen compliance and operational efficiency. Recommendations: - Broaden the implementation of Reg Tech and Open banking platforms. - Develop AI and Big Data-based credit rating systems. - Create a unified API ecosystem to enhance client integration. - Design nationwide programs to improve financial literacy. - Strengthen cybersecurity infrastructure and align it with international standards. References: 1. Presidential Decree of the Republic of Uzbekistan “On the Digital Uzbekistan – 2030 Program.” Tashkent, 2020. 2. Central Bank of the Republic of Uzbekistan. “Digitalization Processes in the Uzbek Banking Sector.” Report, Tashkent, 2022. 3. Mamatqulov Sh.R. “Prospects for the Implementation of Digital Technologies in Commercial Banks.” Economy Journal, Tashkent, 2021. 4. Abdurakhmanov Q., Ergashev B. Digital Economy: Theory and Practice. Tashkent: Science and Technology, 2020. 5. Mirziyoyev Sh.M. The Strategy of New Uzbekistan. Tashkent: Uzbekistan, 2021. 6. Sberbank of Russia. Digital Transformation of the Banking Sector. Moscow, 2021. 7. Tinkoff Bank. Annual Report on Digital Service Development. Moscow, 2022. 8. European Banking Authority. Digital Banking in Europe: EBA Report., 2021. 9. PSD2 Directive (EU) 2015/2366 of the European Parliament. Brussels, 2015. 10. Federal Reserve System. The Future of Digital Banking in the USA. Washington DC, 2020. 11. PayPal Holdings Inc. Annual Report 2021. San Jose, 2021. 12. Lee, J., & Kim, H. Digital Banking Transformation in South Korea. Journal of Financial Innovation, Vol. 8(2), 2020. 13. Kakao Bank. Annual Report 2021. Seoul, 2021. 14. Ant Financial (Alipay). Building a Digital Financial Ecosystem. Beijing, 2020. 15. Tencent Holdings Ltd. WeChat Pay Development Report. Shenzhen, 2021. 16. PwC. Global FinTech Report: The Road to Digital Banking Ecosystems. 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