Digital Banking In Pakistan: A Comparative Analysis with Peer Countries

Digital banking has emerged as a revolutionary force, transforming the financial landscapes of many countries by offering new ways to access financial services. In South Asia and Southeast Asia, countries like Pakistan, India, Malaysia, and Bangladesh have embraced digital banking to varying extents, each with its own unique approach. This essay provides a comparative analysis of digital banking in Pakistan, examining how it stands in relation to its peers—India, Malaysia, and Bangladesh. The comparison will focus on the digital banking infrastructure, customer adoption, regulatory frameworks, and the challenges and opportunities faced by these countries.

Digital Banking Infrastructure

The infrastructure for digital banking is foundational to its success, encompassing everything from technological platforms to the availability of internet and mobile networks.

In Pakistan, digital banking infrastructure has seen significant growth in recent years, driven by increased smartphone penetration and government initiatives like the Pakistan Vision 2025, which emphasizes digital transformation. The State Bank of Pakistan (SBP) has been instrumental in promoting digital financial services through policies that encourage innovation and financial inclusion. Mobile banking apps and online platforms offered by both traditional banks and emerging fintech companies have expanded access to financial services, particularly in urban areas.

India, on the other hand, has one of the most advanced digital banking infrastructures in the world, largely due to the government's proactive approach. Initiatives like the Unified Payments Interface (UPI) have revolutionized digital transactions, making it easy for people to transfer money instantly across different banks and platforms. The Indian government's push for a cashless economy, especially following the demonetization in 2016, has further accelerated the adoption of digital banking.

Malaysia's digital banking infrastructure is also well-developed, with a strong focus on fintech innovation. The Malaysian government, through Bank Negara Malaysia, has introduced a comprehensive regulatory framework that supports digital banking while ensuring consumer protection. The country's high internet penetration rate and a tech-savvy population have contributed to the widespread use of digital banking services.

Bangladesh, while relatively behind India and Malaysia, has made significant strides in building its digital banking infrastructure. The introduction of mobile financial services (MFS) like bKash has played a pivotal role in bringing banking services to the unbanked population. The Bangladesh Bank has been supportive of digital financial inclusion, and the country's banking sector has increasingly embraced digital platforms to reach a broader customer base.

Customer Adoption and Usage
The adoption of digital banking services varies significantly across Pakistan, India, Malaysia, and Bangladesh, influenced by factor.

1. Digital Banking In Pakistan: PRESENTED BY: Ms Farzeen Shaukat Ms Tayyaba Malik Mr Hammad Soomro SUPERVISORS A Comparative Analysis With Peer Countries Mr Sarim Masood, SO Admin Mr Sajjad Hussain, SO Admin

2. TECHNOLOGICAL INFRASTRUCTURE DIGITAL BANKING IN PAKISTAN DIGITAL BANKING PENETRATION USER DEMOGRAPHICS We Compared Digital Banking Landscape In Pakistan With Peer Countries

3. Digital Banking Penetration DIGITAL BANKING IN PAKISTAN Traditional Bank Account Holding Rate Vs Digital Bank Account Holding Rate

4. Indicator (% age 15+) Pakistan India Malaysia Bangladesh Account ownership 21% 80% 85% 50% Mobile money account 7% 5% 13% 21% Borrowed from a financial institution 5% 7% 18% 6% Saved at a financial institution 4% 20% 34% 12% Made or received digital payments 9% 35% 70% 23% Digital Financial Services DIGITAL BANKING IN PAKISTAN

5. Technological Infrastructure DIGITAL BANKING IN PAKISTAN ICT Development Index (IDI) (2023): The ICT Development Index combines various indicators such as internet and mobile penetration, broadband subscriptions, and digital skills.

6. User Demographics DIGITAL BANKING IN PAKISTAN The elder generation, aging 35+ is reluctant to use digital banking.

7. DIGITAL BANKING IN PAKISTAN Despite significant advancements in digital banking globally, Pakistan's adoption and integration of digital banking services lag India, Malaysia, and Bangladesh.

8. WHY IS THAT? DIGITAL BANKING IN PAKISTAN

9. Macroeconomic Stability DIGITAL BANKING IN PAKISTAN Pakistan is slow with its GDP growth rate compared to other South and Southeast Asian countries.

10. DIGITAL BANKING IN PAKISTAN Inflation Rate in Pakistan is higher then the rest of the countries.

11. Financial Inclusion and Consumer Behavior DIGITAL BANKING IN PAKISTAN Low Financial Literacy Cash-Driven Economy

12. Regulatory and Policy Environment DIGITAL BANKING IN PAKISTAN Regulatory Challenges Lack of FinTech-Specific Regulation

13. Challenges And Opportunities DIGITAL BANKING IN PAKISTAN DIGITAL LITERACY CYBERSECURITY RURAL INFRASTRUCTURE

14. Collaboration with Fintech Infrastructure Development Regulatory Enhancements Financial Literacy Programs Recommendations For Enhancing Digital Banking In Pakistan DIGITAL BANKING IN PAKISTAN

15. FUTURE OUTLOOK DIGITAL BANKING IN PAKISTAN Branchless Banking Initiatives Mobile Wallet Penetration Cost-Effective Digital Solutions Public-Private Partnerships Innovative Financial Products

16. CONCLUSION DIGITAL BANKING IN PAKISTAN

17. DIGITAL BANKING IN PAKISTAN BANKING IS IMPORTANT, BANKS ARE NOT.

18. THANK YOU GROUP A DIGITAL BANKING IN PAKISTAN