It was not that long ago, Pakistani bank account holders had to wait in the long ques for their basic banking transactions. Gladly, with the introduction of ATMs about two decades ago, many banking procedures can now be done without even visiting the bank branches. Despite of this, still there is an issue of “mobility” as account holders have to personally visit ATM’s for their banking transactions.
This issue of mobility opened up new avenue and now there is rapid increase in information sharing between financial institutions and technological firms. This merger of Finance and Technology is popularly known as “FinTech”.
Today, FinTech has become a global phenomenon that has made the banking and day to day financial services more accessible to a common man particularly through smartphones. According to the forecasts of International Data Corporation (IDC), 70% of smartphones were destined to be shipped to emerging markets while only 30% to the developed world. This 70% of smartphones are now widely being used as mobile bank accounts and mobile wallets.
Talking specifically about Pakistan, according to World Bank, about 100 million adults in Pakistan don’t have access to formal and regulated financial services. This number is approximately 5% of the world’s entire “unbanked” population, which currently stands at 2 billion. Despite of this, there is one huge positive aspect that Pakistan leads in digital finance and branchless banking in South Asia as 6% of adults have mobile accounts compared to South Asia’s average of 2.6%. This shows that Pakistani consumers are ready to accept the new technology.
The acceptance of new technological platforms is evident from the fact that Pakistani banking industry that started back in 1947 touched figure of 40 million bank accounts in the year 2016 whereas it took branchless banking only five years to reach 17 million accounts. There is also a forecast that in few more years this figure would reach 20 to 30 million. This growth was possible due to the increase in the mobile phone subscribers in Pakistan.
With the introduction of National Financial Inclusion Strategy (NFIS) launched in 2015, now almost all banks have introduced their official banking apps. These apps allow users to perform basic banking operations like checking balance, transfer of funds, payment of utility bills etc. All these transactions are done over a safe and secure network and secondly the issue of mobility (mentioned earlier) has also been solved as all transactions can be done with a touch of few buttons right from home.
Now banks and financial corporations should further try to promote and educate their account holders so that they can get maximum benefit from the facilities available through branchless and mobile banking. Moreover, products like Telenor Easypaisa, SimSim Mobile Wallet, and Jazz Cash are disrupting the normal day to day financial processes in the country serving almost every part of the society particularly the unbanked population.
Economy is the backbone of all kinds of development process thus the amalgamation of technology with finance is the step in the right direction. Now to further utilise this FinTech phenomenon, it is mandatory for the relevant authorities to promote the products among the masses.