The era of a strict supervisory model is losing relevance, and regulators must shift toward more flexible approaches, Zaur Hajili, Director of the Department of Financial Monitoring Policy and Regulation at the Central Bank of Azerbaijan (CBA), said at the 10th International Financial and Banking Summit in Baku.
Report quotes him as saying that the traditional model is already becoming obsolete.
"Rapidly developing fintech technologies, virtual assets, and artificial intelligence make it necessary to introduce new approaches," he said.
He also noted that compliance approaches across Central Asia and the Caspian region differ significantly. Inconsistencies in regulatory frameworks and their application create regulatory arbitrage or "grey zones."
Such differences are considered one of the main factors increasing country risk for major investors, international organizations, and correspondent banks.