The Path to Financial Empowerment is Digital

Advertisement Digital transformation is enabling banking activity previously unknown to the majority of Pakistan, especially in rural areas, where it isn’t uncommon for an entire family to share just one bank account. The national challenge of financial inclusion in the digital age can only be adequately solved with cloud-based banking. Home to 8% of the world’s unbanked adults, Pakistan offers a vast fertile territory for digital banking to improve the reality of everyday life of businesses and individuals alike. Digital banking in developed Western economies has adopted a customer-first design, matched with state-of-the-art technology to completely redefine value exchange and banking. Pakistan has a lot to learn from digital banks that emerged in developed economies and became successful in growing their brands’ social capital by bridging the gaps left wide open by old-fashioned banking. Digital banking is faced with another immense opportunity in the form of Pakistan’s young, digital-savvy population that expects the banking sector to catch up with the rest of the world. The nation’s 55% unbanked citizens also own a mobile phone that makes for the perfect gateway to financial inclusion. Advertisement In its ambition to boost nationwide financial inclusion, the State Bank of Pakistan is in the process of issuing digital banking licenses to up to 7 applicants. This is the first step towards full-fledged branchless banks in Pakistan. Among the applicants are traditional banks, fintechs, telcos, and international banks and fintechs. Considering the limited amount of licenses to be issued, it’s fundamental that they be issued to the most suitable applicants for the nation’s financial inclusion goals. Commercial banks are already focused on digitalisation and continue to seek progress in that direction, irrespective of the digital banking license. Incumbent players like UBL and Standard Chartered already possess a strong digital presence that allows them to stay competitive against upcoming virtual banks and leverag