The
Governor’s address covered many themes and underscored the SBP’s commitment to
fostering innovation and digitalization within the banking sector, paving the way
for a dynamic financial sector in Pakistan. The Governor shared the SBP’s
digital transformation started in 2002, when SBP implemented the Temenos Banking
System, and an ERP system for non-banking transactions, as well as a data
warehouse for massive data-related requirements. In 2008, SBP implemented the
Real-Time Gross Settlement System called PRISM for processing wholesale,
large-value, institutional payments. Recently, SBP established its
state-of-the-art, Tier-3 data center, the first of its kind in Pakistan.
The
Governor shared that in 2008, SBP issued regulations for branchless banking
services to enable the delivery of basic banking services from
retail stores and kiryana shops. This initiative has resulted in a
significant increase in the number of unique bank accounts, from 16% of the
adult population in 2018 to 64% in 2024. He shared that in 2022,
SBP issued the framework for establishing Digital Banks
in Pakistan to further
facilitate the entry of IT-enabled, non-banking entities into the financial
services industry. As a result, in principle approvals were issued to
five applicants who will shortly start pilot operations in the country.
The
Governor shared that in line with international trends, SBP started working on
transforming its retail payments industry by implementing the
state-of-the-art ISO-20022 payment standard. Hence, Raast, our instant payment system
based on the ISO 20022 standard, was launched in 2021. 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. He 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 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.
Since 2020, the overall number of retail transactions processed digitally
has increased by 30%, and the share of digital payments in total retail
payments by volume has risen from 76% in FY23 to 84% in FY24. The
number of transactions processed using mobile and internet banking is growing at an
annual rate of 70% and 30%, respectively. This is not surprising as the
majority of our population is young and adept at using mobile apps.
The
Governor shared that it is heartening to see the emergence of a vibrant fintech
sector in Pakistan. These fintechs are striving hard to identify
new markets and use cases and offer their tech-enabled services. He encouraged the IT
sector to play a pivotal role in this transformation.
