Fintech Ecosystem - the future of banking.

Byline: Nazir Ahmed Shaikh

'Digital' has become one of the most commonly used buzzwords these days. Everything now has the precursor 'digital' attached to it, and digital banking is no exception. Digital banking means more than just going paperless. Banks are offering a new and improved customer experience and delivering faster and more efficient services. Banks are not known for being fast movers. Customers are still waiting for this new banking experience, which will bring many new features, including anytime and anywhere banking, ultra-fast response times, and ubiquitous advisors. The issue is not finding new digital solutions; the issue is the industry's long-standing history of not keeping in shape.

The global pandemic may have brought the significance of digital banking platforms to the surface, but mobile and online banking aren't new. The pandemic has merely accelerated a phenomenon that was already taking place. Digital banking offers a host of important benefits for consumers that can make their lives easier and make them better dispossessors of their money.

The definition of digital banking is simply the provision of service over the internet or through a digital medium. An example would be to transfer money to a mobile wallet as opposed to giving a cheque or cash or using an app to pay your utility bill as opposed to physically with cash. The real end result has to be a change in the customer journey. The customer must find the use of the digital medium convenient, secure and transparent but not necessarily less expensive.

Digital Banking in Pakistan

Digital banking has been operational in Pakistan for quite some time. However, the ongoing pandemic has played a pivotal role in further shifting the mindsets of our banking customers towards going digital. The findings from one of the first digital banking experience surveys in Pakistan- Banking in the Digital Age: Exploring Pakistan's Potential, was conducted by A.F. Ferguson and Co, re-affirm the increasing customer inclination towards convenience and personalized banking made possible through digitization. The survey highlights that 82% percent of all consumers visit their physical bank branches once in a few months or only visited them once to open their accounts. Instead, 67% and 55% of the people prefer to use mobile and internet banking respectively to fulfill their banking needs.

Although Pakistan is mainly a cash-based economy, behaviors are changing and it cannot be denied that the future is digital. Mobile and internet penetration in Pakistan is growing exponentially - more than 83% of our population uses cellular phones and half of them (42%) are 3G/4G connection users. This shows a strong inclination of our masses towards digital services. Also, the government and other respective authorities are cognizant of this trend and have continuously introduced plans and ideas to facilitate the digital shift such as Raast, PayPak, and Roshan Digital Account to name a few.

Year 2020 and beyond...