How Pakistan is Using Technology to Make Banking Better

Pakistan is making a big change in how people use money and banks. They are using technology to make things faster, easier, and safer. This change is called the Digital Finance Revolution.


More Digital Payments

Many people in Pakistan are now using digital payments, which means using phones or computers to pay for things instead of cash. The State Bank of Pakistan (SBP) reported that 82% of all payments were digital in the first part of this year, a big increase from before.


New Payment System

The SBP introduced the Raast Instant Payment System in 2022. This system allows people to send money to others instantly and for free. First, it was used for sending money to many people at once or between friends. In December 2023, it started being used to pay businesses too.


Protecting People from Scams

With more people using digital payments, there have been more online scams. The SBP has made rules to help protect people. Banks now have to improve their systems to stop fraud. If they don’t, they will be responsible for any money that customers lose.


New Types of Banks

The SBP is also letting new types of banks start. These are called digital banks and electronic money institutions (EMIs). Digital banks do everything online without physical branches. In January 2023, five new digital bank licenses were given out. Some of these banks will offer special services like Islamic banking, which follows religious rules.


Open Banking

Open banking is another big change. This system allows different financial companies to share information and services safely. It means more competition and better services for customers. The SBP is working on rules to make open banking even better and safer.


Testing New Ideas

The SBP is also letting companies test new ideas in a safe way through something called a regulatory sandbox. This helps new financial services develop faster and safely.


Future Challenges

While there has been a lot of progress, there are still some challenges to overcome:

Person-to-Government Payments: They need to make it easier to pay the government using digital methods.
Data Regulations: Current rules say that all customer data must stay in Pakistan. This makes it hard for international companies to bring their best technology here. Changing this could help improve security and innovation.
International Transfers: Right now, it is very hard to send money out of Pakistan. This makes it tough for businesses to grow. Relaxing these rules could help attract more investment.

Pakistan is making great strides in using technology to improve banking and financial services. While there are still some areas to work on, the future looks bright with safer, faster, and more inclusive financial services for everyone.