Digitalization of Accounting In Banks: Efficiency and Risks In Uzbekistan’s Banking System

Abstract

The global banking sector is undergoing a profound shift driven by digital technologies, with accounting functions at the forefront of transformation. In Uzbekistan, governmental initiatives promoting digitalization, particularly the 2020 Presidential Decree, have accelerated the adoption of enterprise resource planning (ERP) systems and automated accounting tools in commercial banks. Despite growing digital adoption, empirical research addressing the practical efficiency gains and risks associated with digital accounting in Uzbekistan’s banking sector remains scarce. This study investigates how digitalization impacts accounting efficiency, transparency, and operational risks within Uzbekistan’s commercial banks between 2020 and 2024. Findings demonstrate that digitalization reduced financial reporting error rates from 6.5% to 2.7% and decreased report preparation time from 12 to 5 days, significantly improving transparency and boosting foreign direct investment. However, challenges such as cybersecurity threats, high implementation costs, and regulatory inconsistencies were also identified, disproportionately affecting smaller banks. By employing a mixed-methods approach combining qualitative analysis of bank documentation and quantitative assessment of key performance indicators, the study uniquely bridges theoretical frameworks with practical realities in an emerging market context. To sustain digital gains, policymakers should enhance financial literacy, provide financial support for smaller banks’ technological upgrades, and harmonize local regulations with international standards, ensuring that digitalization strengthens resilience and competitiveness in Uzbekistan’s banking system.