March 5, 2022: with major digital enablers and fundamental components of a digital economy in place, Pakistan is now well set for a major digital evolution, Dr Reza Baqir, Governor State Bank of Pakistan stated in his keynote speech while addressing an interactive discussion on ‘The Promise of Digital Banks’ organized by the State Bank of Pakistan, said a press release.
He emphasized that, as noted in a recent opinion piece, a key goal behind SBP’s framework for digital banks is to promote financial inclusion and innovation in the country and provide an ecosystem where customer and customer service is prioritized.
He highlighted the challenges and gaps in the existing banking space and mentioned that SBP has laid a solid foundation for the provision of digital financial services by providing the legal and regulatory environment and core infrastructure.
Dr Baqir also spoke about the steps taken by the SBP to promote innovation in financial services, including removing barriers to entry for non-banks and fintech, frictionless digital account opening for individuals, in-app biometric verification to facilitate customers’ digital on-boarding, and introducing Pakistan’s Instant Payment System- Raast.
Dr Baqir also emphasized that important initiatives are under discussion with stakeholders on the Common Know Your Customer framework—which will enable Financial Institutions to share KYC information with customer consent, to improve customers’ digital journey—and Open Banking.
The session was organized for domestic and international stakeholders including banks, fintechs, venture capital firms, digital banks and representatives of the business community from across the world.
The webinar was aimed at sharing the broad contours of SBP’s initiative and the experiences of other international players.
The panellists highlighted the real potential and opportunities of digital banks globally for international players including fintechs, startups, venture capitalists etc. and deliberated on various aspects of the regulatory challenges. The subject matter experts highlighted that innovation in the financial sector is largely led by the combined efforts of a regulator and other relevant players.
Appreciating the flexibility of ‘SBP’s Licensing and Regulatory Framework for Digital Banks,’ which accommodates a range of investors independently or in collaboration, the panelists were of the view that the incoming players can benefit from opportunities presented by Pakistan and make a tangible and significant increase in meaningful financial inclusion.
The panel was confident that digital banks will become an essential part of the financial ecosystem and provide people with access to a wider range of financial services, and advance the broader agenda of financial inclusion.
Press Release
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