Farid Mammadov: Banks must adapt to new reality – embedded finance, AI, and decentralization

Modern banks are striving to maintain their relevance amid rapid technological change by focusing on three key areas: embedded finance, artificial intelligence (AI), and the decentralization of the financial industry, Farid Mammadov, CEO of Bir Ecosystem, Chairman of the Supervisory Board of Kapital Bank, member of the Supervisory Board of PASHA Technology LLC, and Deputy CEO of PASHA Holding, said during a session of "AmCham Lead x Talks," according to Report.

“First, we are witnessing the transformation of finance into an everyday utility. Banks risk becoming providers of standard services—like electricity or water. To avoid this, we are developing the model of embedded finance,” he said. “This is especially relevant for our region. It involves building ecosystems where financial services are seamlessly integrated into daily life—whether it’s shopping, transportation, or subscriptions.”

According to him, the second key direction is artificial intelligence.

“AI has been in the spotlight for two years now, and I’m sure that won’t change at the McKinsey conference in June. This proves that AI is not a temporary trend. Experts compare it to the steam engine, calculator, or abacus—technologies that permanently changed the course of history. AI is the first technology capable of talking to humans. It’s a revolution,” Mammadov emphasized.

The third direction, he said, is the decentralization of the financial system.

“For a long time, banks were the sole center of finance. Regulation and high entry barriers protected them from competition. But that has changed. Fintech startups—once underestimated—have now grown into a full-fledged industry. Technologies like blockchain and tokenization are driving decentralization, enabling even small players to influence the financial market,” noted Farid Mammadov.