Recently the Prime Minister of Pakistan launched the ‘Digital Pakistan’ program with the vision to accelerate the journey of a developed and interconnected Pakistan in a Clean, Green, Paperless, transparent and efficient manner. On a global level, the journey of digitalization started with the ‘Industrial Revolution (IR) 3.0’ or the ‘Digital Revolution’ which marked the adoption of computers and automation systems in various business sectors. The next IR, i.e. Industry 4.0 took the ideology of digitalization to new heights with the ‘combination of cyber-physical systems, the Internet of Things and the Internet of Systems in which computers are connected and communicate with one another to make decisions with little or no human involvement’. In addition to the numerous benefits offered by IR 4.0 to all the stakeholders, one of the greatest advantages of digitalization is the development of a Clean and Green economy.

Various industries have made great strides in the area of digitalization and the global banking industry is no exception. The banking sector is one of the largest consumers of resources such as paper and electricity through the extensive networks of branches and Automated Teller Machines (ATMs). The carbon footprints of this industry are not just limited to its daily banking operations. All over the world banks have been involved in financing polluting industries such as fossil fuels, textiles, mining, chemicals, etc and playing a significant role in global climate change and natural resource degeneration. However, Green Banking through the technologies of digital banking can play a significant role in minimizing the adverse environmental impacts of a bank’s business operations.

Green Banking involves digitalizing bank operations through the concept of the “Bank of Things”. This is derived from the concept of “Internet of Things (IoT)”, which involves the “network of interrelated computing devices that connect and exchange data with one another via the Internet”. The Bank of Things (BoT) technology enables banks to be in continuous contact with their customers through cyberspace and offer limitless services, such as automated guidance on investment, spending, savings, etc. based on the customer’s real-time financial data thereby eliminating the use of various resources that are required in providing banking services through a brick and mortar operations.

The world is moving towards cyberspace banking with banks operating in cyberspace without any branches. This digitalization of the banking services will eliminate the branch’s carbon footprints and save resources at the consumer end as well. Banks are launching Artificial Intelligence (AI) and Machine Learning (ML) powered robots to assist its customers  to search transactions, transfer and deposit funds and get advice on financial products. Banks  are also using “BoT” in a number of other operations, such as gathering Know-Your- Customer (KYC) data. With the use of technology, banks can reduce money laundering and complete the KYC process using the customer’s digital signature without any delay and secure the data using cryptographic techniques such as blockchain technology. Powered by 5G internet, global banks are using cloud computing and quantum computing to provide consumers with immense data processing capabilities through everyday devices. The rapid adoption of cryptocurrency is also an important milestone in the digitalization and ultimate greening of a country’s economic system. The Financial Action Task Force (FATF) is also introducing regulations for cryptocurrency transactions to reduce the risk of money laundering.

As the developed countries are envisioning and planning their journey towards IR 5.0, the Digital Pakistan program is an effort by various organizations to take Pakistan in the era of Industry 4.0. The effects of digitalization are emerging in a number of business sectors and government organizations in Pakistan. Some examples of government’s digitalization initiatives include automation of the National Database and Registration Authority (NADRA), Land Revenue Authority, E-Enablement of Federal Investigation Agency (FIA), Prime Minister office computerization program, computerization and execution of government cases, development of mobile apps for Wafaqi Mohtasib and corruption complaints, etc. The effects of digitalization can also be seen in the Pakistan banking sector. The majority of banks have launched their mobile apps and web-based services for the customers. Digital services such as digital wallets, one-touch banking, biometric verification, collaborating with information technology companies and interconnecting customer data with other organizations are being implemented. The State Bank of Pakistan (SBP) is planning to issue digital currency by the year 2025 and also working on implementing digital currency regulations for Anti-Money Laundering (AML) measures. As compared to the global scenario, the Pakistan banking industry is still at the infancy stages of digitalization.

The adoption of digital banking needs to be synergized with the ideology of Green Banking. Digital Pakistan and Clean and Green Pakistan Index are not two separate initiatives. These are in fact paths leading to a common vision, i.e. a Clean and Green Pakistan. Similarly, if  our banking industry wants to minimize its adverse environmental impacts and benefit the natural environment than it needs to be digitalized. A digital bank is truly a Green Bank. Green Banking promotes the development of a digital and paperless banking industry that can act as a facilitator for the digitalization and ultimate greening of all the other business sectors in an economy. Green Financing by Green Banks can ensure the provision of investment required for various green business initiatives such as the renewable energy scheme by the State Bank of Pakistan or the digitalization of various industrial sectors.

However, the digitalization of any sector of an economy cannot be achieved without first providing awareness, education, and training to all the concerned stakeholders. The President of Pakistan has also linked the success of Pakistan’s digital revolution with the trained human resource in the respective areas. Currently, the majority of the stakeholders have a low level of awareness or knowledge regarding Green Banking adoption. The government needs to realize that the banking industry is one of the major contributors to the country’s economic growth and interconnected with all the other business sectors. It should facilitate the digitalization and ultimate greening of Pakistan’s banking industry. The vision of a Digital Clean and Green Pakistan is not possible without a Green Banking industry.