{"id":24720,"date":"2025-09-30T01:42:08","date_gmt":"2025-09-30T01:42:08","guid":{"rendered":"https:\/\/gsrra.com\/?p=24720"},"modified":"2025-09-30T01:42:11","modified_gmt":"2025-09-30T01:42:11","slug":"pakistan-the-future-of-pakistans-banking-is-digital","status":"publish","type":"post","link":"https:\/\/gsrra.com\/?p=24720","title":{"rendered":"Pakistan: The future of Pakistan’s banking is digital"},"content":{"rendered":"\n

Innovations and ideas displayed here can revolutionise Pakistan’s digital banking<\/em><\/strong><\/p>\n\n\n\n

\"panel<\/figure>\n\n\n\n

Panel Discussion 2: AI-Driven Innovation in Pakistan’s Banking Sector: Challenges and Opportunities for Digital Transformation. Photo Source: Daniyal Khuhro<\/p>\n\n\n\n

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The 23rd Future Banking Summit and Expo focused on the digital transformation of Pakistan\u2019s banking space. through easing digital banking for customers and merchants with cashless solutions, AI integration, and stronger cybersecurity.<\/p>\n\n\n\n

A cashless ecosystem<\/strong><\/p>\n\n\n\n

Faisal Mahmood, head of Digital Public Infrastructure of Karandaaz, outlined the growth of automated teller machine (ATM) transactions and the increased use of point-of-sale (POS) machines since 2020. He said that there is \u201cgreat adoption by the public\u201d for the digital channels that banks offer, emphasising a need for banks to incentivise the usage of cashless alternatives, as Yahya Khan, Group Head and Chief Digital Officer (CDO) of Bank Alfalah, stated that Pakistan has the highest cash-to-GDP ratio among neighbouring countries.<\/p>\n\n\n\n

Yahya talked about Pakistan\u2019s direction with digital innovation and the need to move aggressively towards a cashless economy, adding that the transition towards a cashless economy is reliant on digital access points (DAPs). Merchants are reluctant to install these due to perceived costs of digital transactions, yet are unaware of the \u201chidden\u201d costs of using cash, so it is important to have merchants install and use these DAPs, as there are around \u201cone hundred million digitally enabled customers\u201d ready to use these cashless methods and services. Ovais Habib Khan, Chief Operating Officer of TPS, echoed Yahya’s point on people\u2019s ignorance regarding the cost of handling cash.<\/p>\n\n\n\n

Najeeb Agrawalla, CEO and Director of 1LINK, detailed PayPak\u2019s plans, including the tokenization of PayPak by next year, bringing tap-to-pay and card-on-file features for users.<\/p>\n\n\n\n

Another key feature of a cashless economy is the ability to recycle cash past banking hours. Fazal Rehman of Diebold Nixdorf explained that this would enhance user experience and solve the problem of cash flows getting frozen after banks close for the day.<\/p>\n\n\n\n

\"Innovative
Innovative Pvt Ltd at the Future Banking Summit and Expo. Photo credit: Express Tribune<\/em><\/p>\n\n\n\n

Vendors such as TouchPoint and Innovative displayed cash and cheque recycling machines at the expo hall.<\/p>\n\n\n\n

AI augmented banking<\/strong><\/p>\n\n\n\n

Rehman spoke about Pakistan\u2019s history with digitisation and how incorporating AI into the bank\u2019s infrastructure is the logical next step for Pakistan\u2019s banks since, according to him, \u201c95% of teller transactions can be automated\u201d.<\/p>\n\n\n\n

\u201cI don\u2019t see any function, any area in the bank where you can\u2019t apply it [AI]\u201d. Meezan Bank CDO Shariq Mubeen added. <\/p>\n\n\n\n

There is still a need to keep the human element, as certain decisions and discretionary elements are needed.\u00a0\u201cGoing forward, I see a lot of operational nature jobs going away, which is bad news as all of these people will become redundant.\u201d<\/p>\n\n\n\n

\u201cThese people can then be retrained, reskilled, and redeployed\u201d.<\/p>\n\n\n\n

CDO of Faysal Bank Aminur Rahman likened the incorporation of AI systems to the advent of the ATM. The existence of new technology did not remove the teller\u2019s job; it simply evolved it.<\/p>\n\n\n\n

Dr Aneel Salman, Chair of Economic Security at the Islamabad Policy Research Institute as well as of the National AI Policy Committee, spoke at length about the effects of AI on banking.<\/p>\n\n\n\n

He said the deployment of AI on large scales would give bankers significant power, but would also magnify the need to use it ethically.<\/p>\n\n\n\n

The benefits AI will confer would be interim, he warned. It will be the banks that bring in AI with \u201ctrust, culture, and strategy\u201d that will stay ahead of others.<\/p>\n\n\n\n

The effect AI has is vast: it approves loans in record time, prevents fraud in real time, and personalises financial advice. According to him, AI-driven underwriting could save banks $31 billion annually, and AI-powered fraud detection has cut false positives by 20%. \u201cBanks adopting AI report 70% to 80% of their incremental value concentrated in just a handful of domains,\u201d he noted.<\/p>\n\n\n\n

The National AI Policy and fintech<\/strong><\/p>\n\n\n\n

Salman related the National AI policy\u2019s six pillars directly to banking: innovation in fintech sandboxes would accelerate AI-based credit scoring, and training bankers in AI facilities would make them fluent in finance and machine learning. He said that AI will provide better cybersecurity and risk-model solutions, and will evolve public-private partnerships by streamlining remittances and microfinance systems.<\/p>\n\n\n\n

He added that AI infrastructure can also bring high-performance computing that would \u201ccut risk simulations from weeks to hours.\u201d<\/p>\n\n\n\n

Lastly, advancements in digital infrastructure would beget international partnerships, \u201clinking Pakistan\u2019s financial institutions to the global AI research standards and markets.\u201d<\/p>\n\n\n\n

\u201cThis is the bridge between vision and action.\u201d<\/p>\n\n\n\n

To these experts, AI is the next step in our financial evolution and will work alongside humans, not replace them. <\/p>\n\n\n\n

New-age cybersecurity<\/strong><\/p>\n\n\n\n

AI both augments cybersecurity systems and weakens them. Country General Manager of CISCO Kashiful Haque said that AI can hack systems that would take humans hours or days to do within minutes. He added that there are never enough cybersecurity exercises a company or banking establishment could conduct, nor is there too much money to pour into cybersecurity.<\/p>\n\n\n\n

The panel on cyber resilience discussed and concluded that constant and consistent investment in AI-powered solutions to augment cybersecurity is the only way to keep people\u2019s data safe in the current age.<\/p>\n\n\n\n

Business Development and Project Director of Toppan Security Sebastian Bautista provided their company\u2019s solution to fraudulent practices: bank cards with dynamic card verification values (CVV), which prevent malicious actors from stealing card data by changing the CVV for every sale. This is useful to prevent ATM and POS machine skimming.<\/p>\n\n\n\n

\"Toppan
Toppan Security at the Future Banking Summit and Expo. Photo Credit: Express Tribune<\/em><\/p>\n\n\n\n

However, other types of fraud, like phishing, are much harder to avoid as they prey on human ignorance rather than systemic faults.<\/p>\n\n\n\n

Is this feasible?<\/strong><\/p>\n\n\n\n

Installing systems nationwide that allow cash recycling is no small task, and while people do use online payment methods, people with undeclared currency would still rather use cash-based systems,\u00a0which are harder to track, doing nothing to remedy the high cash-to-GDP ratio problem.<\/p>\n\n\n\n

Getting POS machines to smaller merchants is an essential and lengthy first step to begin transitioning to a cashless economy, and incentivising merchants and consumers to use digital alternatives over cash will be difficult due to poor connectivity to banking systems and perceptions regarding taxation when using one over the other.<\/p>\n\n\n\n

According to Tughral Ali, head of UBL Pay, Raast reduces the cost of transactions, a pain point for merchants. However, awareness of this is not widespread.<\/p>\n\n\n\n

Installing AI infrastructure and training bankers on policy and uses will take time. Use cases, both internal and external, must first be made. Rehman states that AI must first be used to streamline internal processes and then be implemented on a large scale for external use, so it will be some time before we see AI implemented on the consumer-facing side of our banks.<\/p>\n\n\n\n

Despite intentions to retrain workers previously performing “redundant” jobs, regulations would be required to prevent banks from skipping the retraining process by hiring workers already familiar with AI technology.<\/p>\n\n\n\n

While there are hurdles to implementation, starting on a small scale and gradually increasing our capacity would lead to a steady transition to a digital-based economy. The question remains if the financial sector can work in public and private domains to realise this future.<\/p>\n\n\n\n

Reference Link:- https:\/\/tribune.com.pk\/story\/2569283\/moving-pakistans-banking-into-the-future; <\/p>\n","protected":false},"excerpt":{"rendered":"

Innovations and ideas displayed here can revolutionise Pakistan’s digital banking Panel Discussion 2: AI-Driven Innovation in Pakistan’s Banking Sector: Challenges and Opportunities for Digital Transformation. Photo Source: Daniyal Khuhro The 23rd Future Banking Summit and Expo focused on the digital transformation of Pakistan\u2019s banking space. through easing digital banking for customers and merchants with cashless […]<\/p>\n","protected":false},"author":1,"featured_media":24721,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[23760,23983,14965,5994,483,2574],"class_list":["post-24720","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sample-category","tag-advance-technology-3","tag-banking-industry-2","tag-digitalization-2","tag-modernization-3","tag-pakistan-2","tag-reforms-2"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/24720","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24720"}],"version-history":[{"count":1,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/24720\/revisions"}],"predecessor-version":[{"id":24722,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/24720\/revisions\/24722"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/media\/24721"}],"wp:attachment":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}