KARACHI: The State Bank of Pakistan (SBP) recently sponsored an interactive conversation on ‘The Promise of Digital Banks‘ for local and foreign stakeholders, including banks, fintech, venture capital companies, digital banks, and members of the international business community.
The purpose of this webinar was to disseminate information on the SBP’s ‘Licensing and Regulatory Framework for Digital Banks‘ and to highlight the potential of digital banks, particularly in light of international experience.
The webinar’s objective was to share the broad strokes of SBP’s endeavor as well as the experiences of other international players. The webinar opened with a keynote lecture by Dr. Reza Baqir, Governor of the SBP, and was followed by an interactive panel discussion with well-known global experts in the domains of digital banking and fintech.
Dr. Reza Baqir, Governor of the State Bank of Pakistan, noted in his keynote presentation that with significant digital enablers and core components of a digital economy in place, Pakistan is now well positioned for significant digital development. As stated in a recent opinion piece, the SBP’s framework for digital banks is meant to encourage financial inclusion and innovation in the country, as well as to build an ecosystem that puts the customer and customer care first, as well.
He discussed the limitations and inadequacies of the current banking sector and said that SBP has established a strong basis for the provision of digital financial services by providing the legal and regulatory framework and basic infrastructure.
Dr. Baqir also discussed the SBP’s efforts to promote financial services innovation, including removing barriers to entry for non-banks and fintech, enabling frictionless digital account opening for individuals, enabling in-app biometric verification to expedite customers’ digital onboarding, and launching Pakistan’s Instant Payment System – Raast.
Dr. Baqir further underlined that significant efforts on the Common Know Your Customer framework—which will allow financial institutions to exchange KYC information with customer permission in order to optimise consumers’ digital journeys—and Open Banking are now being discussed with stakeholders.
A panel discussion was led by Tania Aidrus, a co-founder of The Rayn Group. The panellists were Mr. Sopnendu Mohanty, Chief Fintech Officer of the Monetary Authority of Singapore (MAS), Mr. Omer Ismail, the Incoming CEO of ONE, and Mr. Mamoon Hamid, a Managing Member and General Partner at Kleiner Perkins.
The panellists discussed the genuine possibilities and prospects for international participants, such as fintech, startups, and venture capitalists associated with digital banking, as well as numerous regulatory difficulties. The subject matter experts emphasised that innovation in the financial industry is generally driven by the collaborative efforts of regulators and other key stakeholders.
Appreciating the flexibility of the ‘SBP’s Licensing and Regulatory Framework for Digital Banks,‘ which allows for independent or collaborative investment by a variety of investors, the panellists agreed that incoming players can capitalise on Pakistan’s opportunities and contribute significantly to meaningful financial inclusion.
The panellists thought that digital banks would become an important part of the financial system, giving more people access to a wider range of financial services and achieving the goal of financial inclusion.
