BAKU, Azerbaijan, October 20. The Central Bank
of Azerbaijan plans to extend its risk assessment approach from the
banking sector to other segments of the financial sector as part of
efforts to identify and assess risks proactively, Fuad Isayev, the
Central Bank's executive director, said on Tuesday at the
Sustainable Business, Corporate Governance, Risk and Compliance
(GRC) Conference in Baku, Trend's correspondent reports from the event.


He said assessing banks' financial resilience solely on the
basis of capital and liquidity indicators is no longer
sufficient.


"Cyberattacks and violations of international sanctions can
cause significant financial losses and reputational damage to
financial institutions. A cyberattack or a risk of violating
international sanctions can expose a financial institution to
substantial financial and reputational risks," Isayev said.


According to him, the Central Bank supports the development of a
proactive, risk-based regulatory framework that goes beyond
reactive measures and enables risks to be identified in
advance.


Isayev said the Azerbaijan Risk Assessment System (ARAS) has
been applied in the banking sector since late 2025. The approach is
expected to be extended to other segments of the financial sector
in subsequent stages.


"This approach will make it possible to assess banks not only
based on financial indicators, but also in terms of the quality of
corporate governance and internal control systems," he said.







Isayev added that the digital transformation of supervisory
processes is another key priority for the Central Bank.


He noted that a relevant road map covering 2024–2029 had been
developed in cooperation with the World Bank. Its implementation is
expected to accelerate data processing and improve the quality of
banking supervision.


According to the Central Bank official, the regulatory framework
also takes into account the development of financial products and
services, broader access to financial services and resources for
small and medium-sized enterprises, and the promotion of
sustainable development.


He emphasized that it is important to establish regulatory
mechanisms that not only ensure effective risk management but also
support financial sector development and expand businesses' access
to financial resources.