Governor State Bank of Pakistan, Jameel Ahmad, Wednesday, stated that the share of digital payments in total retail payments by volume has risen from 76% in FY23 to 84% in FY24 while the overall number of digital retail transactions has increased by 30%.
The number of transactions processed using mobile and internet banking is growing at an annual rate of 70% and 30%, respectively, he said and added, “This is not surprising as the majority of our population is young and adept at using mobile apps.”
The governor, while addressing the 13th Bank of The Future Forum, also underscored the SBP’s commitment to fostering innovation and digitalization within the banking sector and paving the way for a dynamic financial sector in Pakistan.
He noted that rapid technological change has not only enabled banks to offer innovative financial services to customers but also empowered regulators to ensure compliance effectively and efficiently through advanced data collection and processing capabilities.
To facilitate the entry of IT-enabled, non-banking entities into the financial services industry, the governor said that, the central bank issued the framework for establishing Digital Banks in Pakistan in 2022 and later in-principle approvals were issued to five applicants who will shortly start pilot operations in the country.
The Governor shared that as a result of SBP’s efforts, today in Pakistan, we have around 59 million branchless banking wallets, 19 million mobile banking apps, another 3.7 million e-money wallets, and 12 million internet banking users.
Reflecting on SBP’s journey of digital transformation starting in 2002 with the Temenos and ERP systems and a data warehouse, Jameel Ahmed said that the Real-Time Gross Settlement System, PRISM, was implemented in 2008 while SBP has recently established state-of-the-art, Tier-3 data center, the first of its kind in Pakistan.
He said that, in the same year, SBP issued regulations for branchless banking services to enable delivery of basic banking services from retail stores and kiryana shops and the initiative has increased the number of unique bank accounts, from 16% of the adult population in 2018 to 64% in 2024.
The Governor shared that the state-of-the-art ISO-20022 payment standard based Raast instant payment system was launched in 2021 and in a short span of almost three years, Raast has processed around 850 million transactions valuing over PKR 19 trillion.
“Today, with 38 million unique Raast IDs, the system processes an average of 2.5 million transactions a day,” the governor said and shared that SBP is also working on integrating Raast with the Arab Monetary Fund’s instant payment system called Buna to facilitate millions of Pakistanis living in Arab countries in sending their remittances to Pakistan with ease and convenience.
The Governor appreciating the emergence of a vibrant fintech sector in Pakistan that was striving hard to identify new markets and use cases and offer their tech-enabled services encouraged the IT sector to play a pivotal role in the transformation.
The event focusing on the critical theme of ‘The Future of Banking’ and organized by Systems Limited, brought together distinguished dignitaries, eminent industry leaders, and fintech experts to discuss the evolving landscape of the banking sector in Pakistan and globally, said a statement issued here.