TBC Bank Uzbekistan, a mobile-exclusive bank, has raised $37 million in a new funding round to strengthen its digital presence in the country and develop innovative AI-powered products. The investment, made by the bank's London-based parent company TBC Group, comes just five months after it raised $38.5 million in July.

The fresh funding will enable TBC Bank Uzbekistan to further expand its digital banking services, including cash loans and deposits, and attract more tech-savvy customers in the country. Uzbekistan has been an attractive market for digital businesses, with nearly 90% internet penetration and a young population, where 60% of the total population is under 30, according to UNICEF.

Despite the significant share of the country's banking assets remaining with state banks, TBC Group sees this as a growth opportunity. The bank, which offers a mobile app for customers to open bank accounts and access banking services, has recently expanded its financial lineup in the country with its in-house processing center, streamlining payment operations and shortening time-to-market for new offerings.

TBC Bank Uzbekistan has also entered strategic partnerships with Visa and Mastercard, introduced the Salom debit card and Osmon credit card, and launched TBC Business, a digital banking service for small and medium Uzbek enterprises. In the last few months, the bank has started building its proprietary AI solutions, including agents to handle payment reminder calls for customers taking loans, which attended 42% of all reminder calls in the third quarter.

Next year, TBC Uzbekistan plans to expand its AI developments by introducing service and sales bots and a dialog-based mobile service, allowing customers to interact with its app using their voice instead of going through a text-based interface. The bank has hired AI experts who built AI assistant Alice for Russia's Yandex, who have developed a finance-specific LLM based on Meta's Llama that understands local nuances and local languages, including Uzbek.

While the exact capital allocated to the AI effort has not been disclosed, Oliver Hughes, head of international business at TBC Group, stated that "a material portion of the money raised will be going to the AI projects, but still, the overwhelming majority will be for building and scaling" its business and consumer products. One of the products in the pipeline is insurance, which the bank currently offers through a third-party service provider but plans to become an insurer in the country next year.

TBC Uzbekistan also plans to introduce a buy-now-pay-later solution and an SME lending product, and enhance its Salom debit card with new benefits and offerings to attract more customers. The bank's user base has grown to 16.9 million users as of September, up from 13.2 million users in December 2023, with 4.9 million monthly active users and a net profit of $27 million for the first nine months of the year, up from $23 million in the financial year 2023.

The bank is projecting $75 million in net profit in 2025. Uzbekistan's banking market is not yet highly competitive, but with foreign players such as Hungary's OTP Bank, South Korea's Korea Development Bank, France's Société Générale, Kazakhstan's Kaspi, and the U.S.'s Citi Bank exploring opportunities in the country, the market is expected to become more competitive in the coming years, according to Hughes.

With its focus on digital banking and AI-powered products, TBC Bank Uzbekistan is well-positioned to capitalize on the growing demand for digital financial services in the country and maintain its dominant position in the market.