E-banking surge
A recently released report by the State Bank of Pakistan states that in the current fiscal year electronic banking transactions constituted a remarkable 85% of the total payments processed by both banks and microfinance banks (MFBs). In contrast, paper-based transactions made up the remaining 15%.
This discernible shift toward digital channels shows the evolving nature of consumer preferences and behaviours in Pakistan. It is emblematic of a post-Covid era, where the pandemic expedited the adoption of online banking and digital payment methods. As individuals and businesses adapted to the challenges posed by lockdowns and social distancing measures, many embraced e-banking for their daily financial requirements. This transformation signifies an increasingly tech-savvy populace with a growing affinity for digital solutions. Moreover, the surge in digital payments has the potential to foster financial inclusion across Pakistan. E-banking offers improved access to financial services for individuals in remote areas with limited physical bank branch accessibility. Mobile banking applications and online payment platforms can bridge geographic disparities, enabling more Pakistanis to participate in the formal financial system, securely save funds and access credit. For financial institutions, this transition presents an opportunity to bolster their digital infrastructure and fortifying cybersecurity measures. As reliance on digital channels grows, comprehensive regulations and protection mechanisms will be imperative. Educating the population about secure online banking practices will also become essential for sustaining trust in the digital financial ecosystem.
This swift transition towards e-banking promises steady technological progress. However, it necessitates proactive measures to secure and democratise digital financial services. Embracing this will help Pakistan reap the benefits of a modernised financial ecosystem and compete in the increasingly digital global arena.
Published in The Express Tribune, October 1st, 2023.
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