The pandemic of Covid-19 not only influenced but changed almost all facets of our lives. The year 2020 saw countries being pushed to the brink of failing health and economic structures, and the challenges are far from being solved by the start of the New Year. While most manufacturing sectors were struggling to survive the problems posed by the pandemic, the world witnessed a massive surge in the adoption of different technologies. In the pandemic-induced technological revolution, the global banking sector was the focal point, and Pakistan’s banking industry was no exception. According to SBP statistics, the number of registered users of online banking in Pakistan, compared to the same period last year, increased by 36 percent to 13,22 million users between July and September 2020. As a result, the volume of mobile banking transactions increased by 139 percent and the volume of internet banking transactions in Pakistan rose by 55 percent.
Through this pandemic, which can be mainly attributed to the digital banking revolution, Pakistan’s banking industry has played a pivotal role in continuing the economic structure of the country. As a country, over the past year, Pakistan has witnessed the tipping point towards digital banking adoption. Whether it was the fast, timely and secure transfer of monetary assistance to the country’s underprivileged masses through the Ehsaas program of the Pakistan Government, or the provision of loans to the pandemic-hit industrial sectors, the effective and timely integration of digital solutions and platforms played an instrumental role in Pakistan’s banking industry. Consumers have been embraced by e-banking transactions, ATM transactions, internet banking transactions, mobile banking transactions, e-commerce and cashless Points-Of-Sale (POS) transactions through the use of credit or debit cards in the world of digital banking. The Covid-19 slogan of “Stay Home, Stay Safe” was only possible when all customers were equipped with digital banking solutions. Standing on the back of the digitalized banking industry, even during the days of the Covid-19 lockdown, many companies were able to keep their operations going.
The road to a digitized, resilient, and constructive financial system, however, is by no means done. Instead, because of a lack of awareness or security issues, we are still at the beginning with a large cash-dependent economy exacerbated by the majority of customers still using cash for everyday transactions and ignoring digital banking solutions. Globally, in terms of technical developments, the banking industry is leaps and bounds ahead of Pakistan’s banking industry. Financial services are provided to customers via Smart Bank branches that provide 24/7 bank services through self-service machines, such as the printing of new ATM cards, cheque books, account statements, etc. The banking industry combines what it provides with various other industries, such as healthcare, government agencies, etc., on a real-time basis by implementing advanced technologies. Due to structurally uncompetitive economics, banks that are behind this trend will start to fight.
It is important to know that “digital” is the latest word for survival during the Covid-19 pandemic and in the post-Covid-19 scenario. A significant part of this modern era is technical developments in every area of our everyday lives. This pandemic has moved us past the tipping point of the digital revolution that can generate exciting exponential impacts on Pakistan’s economic productivity and growth. Nonetheless, without the
This transition can be jeopardized by proactive and productive digitalization of the country’s banking system. Due to the conditions imposed by this new pandemic, Pakistan’s banking industry needs to move forward and build on the momentum produced. There is a need to analyze and re-engineer aging systems across all sectors and harness collaborations focused on communication and exchange of knowledge in real time. The banking sector also needs to develop a more dynamic digital presence across all stakeholders and work on pragmatic digital banking models. The banking system in Pakistan should respond to the opportunities that arise from these difficult times and lead the country into an age of true digitalization.