IMAGINE that you have to open your first bank account or pay your electricity or phone bills but the bank close to your house is notorious for having long waiting lines.
Having waited for fifteen minutes in the waiting line, you begin to wonder if this process could be made any faster and if so, what would it look like? You’d be surprised to know that in certain parts of the world, this pain of waiting in long queues has already been resolved by the power of FinTech.
After downloading a mobile application, all you need to do is to make a couple of taps on your mobile phone to open your bank account or to pay online through your debit card instantly without leaving your house.
FinTech possesses the power to revolutionize the way we live and this is just one example of how FinTech will augment our lives.
It’s a catch-all term for any technology that digitizes, augments and streamlines traditional financial services.
The basic idea behind FinTech is to use technology and automation to enhance the processes involved in financial services. FinTech is wrongly associated with being just “an app”. The app is one of the tools that FinTechs use to offer services.
FinTechs consists of a wide array of activities such as money transferring through smartphones, depositing a cheque and applying for credit through the use of digital platforms.
Furthermore, the scope of FinTech’s applicability ranges from industries such as education, retail banking, consumer, and commercial banking to non-profit organizations.
The services offered by FinTechare varied in nature and are more efficient than traditional banking entities due to the use of technology in their processes as the use of technology has allowed for greater flexibility for the consumer. Transactions are faster and the use of high-level security ensures their safety.
Additionally, FinTechs have also played a crucial role in leveling the playing field for the underrepresented communities.
The brick-and-mortar banks did not cater to such demographics but FinTechdoesn’t differentiate. It allows all customers to carry out transactions with the same ease.
Regulator. The State Bank of Pakistan (SBP) is on a mission to revamp and revolutionize the financial ecosystem of Pakistan.
For this purpose, SBP has taken significant steps. For the first time in this country’s banking history, Non-Resident Pakistanis (NRPs) can now remotely open a bank account in Pakistan through entirely digital and online processes.
This is possible due to Roshan Digital Account. Roshan Apni Car, Naya Pakistan certificates and SamaajiKhidmat are services offered under the umbrella of Roshan Digital account.
Crucially, this initiative supports investment into Pakistan’s stock market and property market which will serve as an important driving force to augment the development of Pakistan’s economy.
This has proven fruitful as funds received via this have grown exponentially from 7 million USD to 1.87 billion USD in a span of 10 months.
As a part of the National Digital Infrastructure Development Strategy, the State Bank of Pakistan launched a micropayment gateway RAAST. This is a key step towards financial inclusion and will bring about seismic changes to Pakistan’s economy.
Particularly, RAAST will provide financial inclusion for underrepresented and unbanked communities, a secure platform for digital payments, and will spearhead the significant transition towards a paperless, green economy. This shows that the regulator is akin to using a digital pathway for financial inclusion.
These initiatives are precursors to a great future. So far it has been a great start but it’s just a start. Pakistan is gearing towards one of the biggest changes in its history of banking. Exciting times lie ahead.
A growing population with a growing number of mobile internet users. Pakistan currently is the 5th most populous country in the world (250 million approximately) and is on track to be 4th within the next couple of years.
The number of mobile internet users has reached a critical mass of 100 million and PTA projects this number to double by 2024. The number of mobile internet users is exponentially growing by about a million a month.
FinTech is not there yet. Pakistan lags behind in tech adoption. One of the key segments happens to be FinTech, which is currently a Greenfield. Incumbents (Banks and telcos) have been complacent. They employcomplex revenue model and have moved away from innovation.
Most of the banks do not offer mobile banking. The ones that do have poor products, limited applicability, complex designs, and unreliable operations.
—Part-II to appear tomorrow.