Publication Details
Abstract
Commercial banks in Uzbekistan and other transitional economies are operating in an environment of accelerating capital market reform, yet their securities brokerage divisions remain poorly equipped for this shift. The gap between regulatory ambitions and on-the-ground operational reality in bank brokerage is wide — and it is poorly understood in the academic literature. We investigate what actually drives brokerage performance in Uzbek commercial banks during the ongoing digital transformation, and propose a practical management framework — the Strategic Brokerage Transformation Model (SBTM) — grounded in both econometric evidence and practitioner insight. We combine a six-year bank-level panel dataset (18 banks, 2018–2023, n=96) with semi-structured interviews of 32 senior banking executives and regulators. Fixed-effects panel regression quantifies performance determinants; thematic analysis of interviews provides organizational context that numbers alone cannot capture. Three factors consistently predict higher brokerage performance: digital infrastructure quality (β=0.412), regulatory compliance capacity (β=0.318), and the depth of specialist human capital (β=0.271). Notably, digital investment and compliance strength interact — banks that build both simultaneously outperform those that focus on either alone. Sector-wide brokerage revenue grew from UZS 847 to 2,314 billion over the period (CAGR 22.3%), though its share of total banking income remains far below regional peers. The full model explains 68.1% of within-bank performance variation. The SBTM organizes the findings into five mutually reinforcing pillars — digital modernization, risk management, regulatory alignment, workforce development, and client-focused innovation. Isolated improvements to any single pillar produce limited gains; durable performance uplift requires progress across all five. We discuss specific implications for bank managers and capital market policymakers..