Fintech is the future of Pakistan-Shaping the future for the better


Shiza Rabbani & Saliha Khalid

The remarkable rise of the Fintech sector in a languid and COVID-hit economy in Pakistan demonstrates that it has a pivotal role to play in the imminent future

The silver lining that incepted with the COVID-19 pandemic was the prompt shift towards digitalization in various sectors of the economy in Pakistan that were formerly moving at a tortoise pace. The financial inclusion of the rural areas of Pakistan is essential for a speedier pace of economic growth that will aid in development. Many of these unbanked people are being brought back through the fintech revolutionary opportunities being offered in Pakistan. Fintech-the catch phrase for financial technology- has made transactions and dealings easier. It is clouding the lines among bankers, tech providers and service providers to almost identical services. Various investors in Pakistan have invested an ample amount of money into Fintech.
Fintech has enabled transparency in borrowing and lending of money as the conventional approaches of borrowing bank loans are gradually being coupled with crowdfunding, as well as peer to peer lending. Furthermore, there is utilization of new financial models that is enabling the access to money easier. In order to automatically algorithm and trade in stock exchange, they are using artificial intelligence and machine learning. This has created the opportunity for individuals to obtain facilities generally available to corporate investors. Fintech has greatly improved the asset management by means of processing and analyzing data tools which has resulted in enhanced asset rebalancing and automation.
The future of financial technology consists of embedded finance, contactless payment, latest partnerships, financial inclusion, acceptance of cryptocurrency, and development in RegTech, GrandTech and WealthTech. Fintech will aggressively increase the customer centricity as majority of financial institutions will emphasize more on customers rather than obtaining funds. Ideally, fintech requires digital partnerships due to cost effectiveness, rapid market delivery and flexibility. Similar to the global growth of Fintech, Pakistan and its institutions has also closely adopted the technology. In addition, the banking sector was the first adopter of this revolutionary technology as it greatly enhanced its financial services promptly. The efficient utilization has aided the country in time saving and promoting new and innovative product and services. The Ehsaas Programme has enabled the local banks to offer financial aid to the underprivileged through the digital platforms.
Pakistan has the most fertile ground for FinTech technology as approximately 73% of the country’s population has access to cellular usage. However, the market is largely untapped which provides an even greater opportunity for FinTech in Pakistan. The State Bank of Pakistan has launched a micropayment gateway called RAAST as an initiative of the National Digital Infrastructure Development Strategy. RAAST is Pakistan’s first instant payment system and is a monumental step in the direction of financial inclusion leading towards seismic changes in the economy. 
The remarkable rise of the Fintech sector in a languid and COVID-hit economy in Pakistan demonstrates that it has a pivotal role to play in the imminent future. Furthermore, the government should examine ways to strengthen the financial industry by supporting innovation and encouraging initiative related to financial education. The benefits of Fintech in Pakistan are broad-ranging and there is tremendous potential for growth. The economy which previously suffered from inadequate representation of diversity and opportunities now has a bright future ahead due to digitization and financial inclusion thanks to FinTech.