The State Bank of Pakistan (SBP) is engaged with the World Bank to beef up security checks on electronic payment transactions as technological advancement is playing a pivotal role in financial inclusion of unbaked people in the country.
Addressing the 14th annual conference on e-Banking here Thursday, Muhammad Ashraf Khan Executive Director SBP said the State Bank in collaboration with the World Bank and other stakeholders has been striving to strengthen the electronic delivery channels through automation and digitisation. The 14th international e-banking conference and exhibition was organised by Total Communications in collaboration with 1Link and Pakistan Software House Association (P@SHA).
"Since Pakistan is experiencing an evolving phase in the digital advancements in the financial sector, we are mindful of the critical role of technology in achieving the strategic objective of national financial inclusion," he said and added that the SBP is currently working with the World Bank experts to develop the future payment system specific to Pakistan.
He said that the alternate delivery channels like e-banking and branchless banking have emerged as supporting pillars of SBP's vision for financial inclusion. Digitally inclusive financial system will ensure reaching unserved and underserved population for meeting their financial needs such as remittances, savings, credit and insurance at their doorstep at affordable cost, he added.
Giving the statistics of e-banking transactions, the Executive Director SBP said over the past five years, e-banking transactions have witnessed a phenomenal growth and the number of users of internet banking has reached over 1.8 million.
Apart from these channels, alternate delivery channels such as branchless banking industry in Pakistan has already seen acceleration and basic financial services can now be accessed in remotest parts of the country through agent network of around 268,000, he said. The numbers are encouraging as a total of 100 million transactions worth Rs 526 billion were carried out during July-September 2015, he maintained.
He said as the payment systems continue to evolve, the SBP will continue to facilitate and foster the safety and efficiency of the payment systems to safeguard public interest. He believed that increasing financial inclusion and developing a robust and modern payment system are two key pillars of SBP Vision 2020 for financial inclusion.
The SBP being a regulator is engaged in creating an enabling regulatory environment towards a modernised and technologically equipped financial sector and as part of these efforts Recently, SBP has taken various steps to promote digital banking in the country, he informed. Moreover, the SBP is also in the process of issuing guidelines on card security and prepaid cards.
"I would like to re-emphasise that banks should continuously seek to educate and familiarise consumers in the use of electronic and other technology-based banking applications which are more efficient and cost effective," Ashraf said.
Going forward, he said the changes brought about by information technology such as virtualisation of it set-ups, cloud computing, grid computing for data analytics and big data, new products with built-in mobility, more sophisticated customers are changing cost structures and enhanced competitive pressures, will transform the structure of the banking industry.
Appreciating the recently launched domestic payment scheme PayPak by 1Link, the Executive Director SBP said this will reduce dependency on global payment schemes and will allow transactions to be routed, recorded and settled within Pakistan. Through the usage of this facility in Pakistan, not only can customers avail the benefit of low-cost, affordable and secure transactions but this scheme will also help reduce the outflow of foreign exchange which was used to pay high fees to international payment schemes, he hoped.
Addressing the conference, Faisal Ijaz, Chief Executive Officer, 1Link said the central bank is about to approve the revised down tariff for financial transactions via PayPak, Pakistan's first domestic payment scheme.
"Besides, financial transactions, the PayPak would also include social services like Benazir Income Support Programme (BISP) and health insurance for poor segment of the society," he said.
Jehan Ara, President, P@SHA said the information technology has revolutionised the payment system in Pakistan. "P@SHA certainly would keep an eye on what is going on," she added.
Achim Von Bremen, Vice President Global Sales and Marketing Banking, Wincox Nixdorf, Germany, asked bankers to pay more attention to customers' financial needs and then invest in technology accordingly. "Putting technology at first is wrong, put customers first," he said.
Mudassar Aqil, Chief Executive Officer, FINCA Microfinance Bank, said his bank takes maximum 72 hours in processing and approving online loans. This time would soon be cut to 24 hours maximum.
Ariful Islam, Deputy CEO, Meezan Bank, said his bank has launched the first Islamic branchless bank of the country recently in collaboration with Ufone.
Mahmood Kapurwala Chief Executive Officer and Waqas Mirza Managing Director & CMO Avanza Solutions also spoke on the occasion. The one-day conference also held two panel discussions on disruptive trends in banking and securing your ATM network & other channels.