Experts outline challenges to digitisation

Fear growth in remote banking may stall if stakeholders’ concerns remain unaddressed

Experts have agreed that the Covid-19 pandemic has accelerated the journey of banks towards digitisation but the lack of infrastructure development and regulatory hurdles may hinder the second wave of technological advancement in the financial sector of Pakistan.

Speaking at the “18th Innovative - Diebold Nixdorf Future Banking 2020”, they feared that the growth in remote banking, achieved during the pandemic, might stall if stakeholders’ concerns remained unaddressed by the country.

According to them, the pandemic has helped enhance digital banking access to existing customers, however, the current situation has created several hurdles in the way of expediting financial inclusion, ie, providing banking services to the unbanked people, especially in remote areas.

Speaking on the occasion, UBL Digital Banking Group Executive Sharjeel Shahid said the financial sector was yet to streamline the use of digital channels for a large section of society and accelerate the much-needed growth in financial inclusion.

“We are yet to meet expectations…to meet financial needs of the unbanked people in Pakistan,” he said.

The financial sector may achieve the next level of growth in the electronic payment system if the National Database and Registration Authority (NADRA) allowed the Application Programming Interfaces (APIs) to access its database, said Avanza Premier Payment Services CEO Syed Adnan Ali.

He elaborated that if NADRA allowed that, companies could double-check whether online users had provided correct information to financial institutions or not.

The use of interfaces would also help the financial sector detect cyber fraud before they took place, said FINJA CEO and Co-Founder Qasif Shahid.

He elaborated that the authority had provided access to only big names in the industry while a large number of smaller fintechs were awaiting access despite repeated requests.

Tez Financial Services Co-Founder Naureen Hyat agreed with co-speakers on the APIs issue and urged the authorities to slash the cost of financial transactions through digital channels in a bid to reduce the nation’s reliance on hard cash.

“There is a need to make digital transactions cheaper to accelerate the next wave of digitalisation,” she remarked.

National Data Consultants President and CEO Ammara Masood urged the stakeholders to invest in infrastructure development in order “to hit the second wave of digitalisation of financial services in Pakistan.”

Eocean CEO Asif Jafri said 50% of the customers, who had switched over to digital banking channels to remain safe during the peak Covid-19 crisis, returned to physical counters in banks.”

WhatsApp remained the largest socialising application around the globe and “financial institutions need to use the application to expedite digital banking like some of the institutions have already done,” he said.

Diebold Nixdorf Middle East Managing Director Habib Hanna said, in his online address, his company had made innovations in ATM machines which enabled customers to use them through smartphones for cash withdrawal and deposit.

“The technology has been introduced keeping in view the coronavirus challenge of making the minimum physical contact to remain safe from the disease,” he said.

Innovative CEO Naveed Ali Baig suggested to financial institutions to adopt hybrid banking - a mix of physical and digital banking - as neglecting hard cash may create chaos in the event of likely or unlikely cyberattacks. “Scandinavian countries have returned to cash printing to avoid the chaos,” he said.

Published in The Express Tribune, October 29^th, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.