KARACHI  - State Bank of Pakistan Deputy Governor Ashraf Mahmood Wathra has said that innovative banking practices have increased the need to introduce fresh laws and regulations to ensure client privacy, information safety, and payment accessibility.

He was speaking at the InfoSec2013 – 8th International Conference on Information Security. Wathra said that globally, more than two billion adults did not have access to formal or semi-formal financial services.

“They are the financially excluded in a world where access to financial services can mean the difference between surviving or thriving. Innovative modes of financial services delivery can have a transformative effect on poor households. At the same time, one billion people with mobile phones do not have even a basic bank account,” he added.

He said the time is ripe for using technology to address financial exclusion. ‘’Technological innovation changes the cost and access equation – making it economically viable for financial service providers, often in partnership, to reach poor people, with a wider range of products and services.”

Wathra said that in Pakistan, the banking system despite its major transformation “remains restricted in its outreach. In a population of 185 million, there are only 32 million deposit accounts and 6 million borrowers.

On the contrary, the number of mobile phone subscribers has crossed 130 million across all economic and geographic segments.”

“To tackle the challenge of financial exclusion, SBP is promoting the use of alternative delivery channels that leverage technology and agents networks,” he added. He said that with this evolution, the need to consistently strive for holistic risk mitigation “has become greater than ever before and financial institutions around the globe realize that they must proactively work to protect customer data and transactions, as well as their own Information system assets”.

He concluded by saying that the deep penetration of mobile phones in developing regions has made cellular networks the preferred communication medium in branchless banking. “As in any financial service, ensuring security of transactions is paramount.”