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Pakistan Digitalisation Updates

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Digital Financial Transactions show double-digit growth in Pakistan: SBP


  • “In the last few years, digital payment transactions in Pakistan have shown significant growth, reflecting the favourable impact of the SBP’s policies in shifting customer preferences. Expansion in digital payment infrastructure as well as the emergence of new payment aggregators have played a role in this growth,” said SBP.

Ali Ahmed
18 Mar 2021





Digital financial transactions continued to show their strong growth in Pakistan during the second quarter, October – December 2020, of the fiscal year 2020-21.



As per the State Bank of Pakistan (SBP), Quarterly Payment System Review (QPSR) released on Thursday, during Q2FY21, 296.7 million e-Banking transactions valuing Rs21.4 trillion were carried out, registering a growth of 24 percent by volume and 22 percent by value, over the same quarter last year.

“In the last few years, digital payment transactions in Pakistan have shown significant growth, reflecting the favorable impact of the SBP’s policies in shifting customer preferences. Expansion in digital payment infrastructure, as well as the emergence of new payment aggregators, have played a role in this growth,” said SBP.

As per the central bank, most of the uptake in e-banking transactions was seen in internet and mobile banking. The volume of mobile banking transactions reached 44 million, (up 147 percent) valuing Rs.1.12 trillion (up 192 percent) compared to 17.8 million transactions valuing 382.5 billion in the same quarter, last year. The number of registered mobile phone banking users reached 9.4 million accounting for an increase of 5%.

Similarly, 22 million internet banking transactions valuing PKR 1.3 trillion were recorded during this period compared to Rs. 1.1 trillion in the previous quarter.

In response to SBP’s measures to incentivize the installation of Point of Sale machines to facilitate digital payments through debit or credit cards, the number of POS machines has shown a notable growth of 18% during Q2FY21, reaching 62,480 installations throughout the country. On these POS machines, 23 million transactions amounting to Rs115 billion were processed during Q2FY21.

Card-based transactions on e-commerce portals also increased substantially, with e-commerce merchants processing 5.6 million transactions through payment cards amounting to Rs15 billion compared to 3.9 million valuing 11.9 billion in the first quarter of the current fiscal year, which marks a shift in the behavior of the Pakistani population toward acceptance of payments by e-commerce merchants, said SBP.

The total number of payment cards issued in the country stood at 44 million out of which 27.6 million are debit cards and 1.7 million are credit cards. Further, 7.6 million were social welfare cards have been issued by banks on behalf of BISP, EOBI, and other government organizations.




 

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Punjab rolls out Digital Driving License system






A 'Digital Driving License' system is being introduced for the first time in Pakistan for the citizens in Punjab, which will simplify the process of obtaining a driving license.

This digital driving license system, which has been introduced in collaboration with Punjab Information Technology Board and Police Officer Rawalpindi, will ease the hassle of citizens by issuing driving licenses only on Identity Cards (ID) cards instead of a long cycle of paperwork.

With this new system, citizens whose driving licenses have expired will also be able to get their licenses back through this digital platform.

Under the digital driving license system, citizens will only have to submit their national identity card and bank challan, in addition to which they will not need any documents.

It is pertinent to mention that before this system was introduced, the citizens had to wait in the long queues to get their driving license. However, the process took months and excessive documentation which at times was a hassle for applicants.
 

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Digitalisation landscape in Pakistan – A tech view
  • Written by Samina Rizwan, enterprise architect, United Bank Ltd
  • 15th December 2020

“Universal access to financial services is within reach – thanks to new technologies, transformative business models and ambitious reforms… As early as 2020, such instruments as e-money accounts, along with debit cards and low-cost regular bank accounts, can significantly increase financial access for those who are now excluded.”
Jim Yong Kim, ex-president, World Bank Group, 2014

In the wake of extremely unforeseeable circumstances that the human race has ever experienced, the economies of the entire world are exponentially going down while the health and human tolls grows yet to reach higher numbers in most of the countries. Taking a look back at the history of global crisis, of the last century post World War II, launch of technological systems, extensive “industrialisation”, “manufacturing” and “production” were the words of survival and hence represented the mainstay of the present-day world economy, also known as the “Golden Age of Technologies”.

Come 2008, another crisis resulting upheaval in the global economic conditions across millions being affected financially due to the downfall in the financial sector with deindustrialisation of leading economies. Technology once again was the tool for reconstruction and restarting the economic growth. Tech firms brought major overhauling in their platforms, moving from legacy to somewhat modern style and hence the rebirth of “innovation”.


Finally, as we are in 2020 and the pandemic has brought the nations to the verge of acute deteriorating health and economic conditions. A glimpse of which can be seen in this World Bank statistical representation of the recessions starting from 1871 to-date. Pakistan being a part of 2.7% contraction as per stats, will face a reversal of the progress in the past few years.






Once again, we do witness the surge in the technological comparative advantage to such precarious economic recessions, where the new word of survival is “digital”. Organisations in Pakistan while struggling with their slow economic growth in the past, yet embraced the technological revolution in the recent past few years. The telecoms and financial sectors being
amongst the top most in the race. Starting from branchless banking, financial inclusion, enhanced payment systems, adoption of financial tools by almost 75% of the unbanked population, emerging fintech disruption of old incumbents, mobilisation and inclusion of very few women entrepreneurs in the economic cycle.
While the nation is trying to overcome the post COVID-19 impacts on its health and living, technology has assisted millions to endure the long lasting effects of the pandemic. Local banks have been able to provide timely aid to the underprivileged masses of the country through the “Ehsaas” programme while using digital platforms and means. Historically country-wide swift and safe financial disbursement programmes to IDPs and calamity stricken masses have also been enabled through technology platforms.

The COVID-19 slogan of “Stay Home, Stay Safe” was possible due to the digitally enabled financial channels and interfaces while providing various financial services to the banked and branchless customers. We also see the ascending usage of online banking, payments, supporting the locked down businesses that took off with the online orders on channels like Facebook, Amazon, Daraz, FoodPanda etc. while banks being the financial arm for the digital payments.

The financial institutions were already gearing up for technological enhancements and overhauls due to the post 2008 crisis and government-backed regulatory reforms to curb corruption and money laundering. Pakistan’s Prime Minister, in his speech to the 75th United Nations General Assembly, also expressed great concerns on the prevention of money laundering from the underdeveloped countries back to the developed countries through mafia of powerful lawyers to whom the entire financial and economic cycle falls prey and collapses.

Regtech, security and regulatory controls have played a vital role to minimise the money laundering acts and ease of legitimate cross-border money transfers and payments. With the extended use of state-of-the-art compliance and regulatory control tools and systems, it has become possible for screening, monitoring and combat fraudulent and illegal money transfers and money laundering to and from the country. This has facilitated the growth inflow of foreign remittances and execute trade transactions thus boosting the country’s economy.

The country is yet to experience a few more intense digital transformations, while learning lessons from other nations who have attempted to perform digital transformation and failed fast to revive the spirits of technological advancement in multiple sectors. Pakistan is still heavily reliant on cash transactions as customers prefer to use cash on delivery (COD) options rather than digital financial services.

However, the ratio of digital financial services versus the 95% of internet users in the country as compared to peer countries, shows a promising future for the digital financial services propagation. While the banks need to work on the pricing and fee structures for all government-to-person (G2P) and person-to-government (P2G) payments to include more people to be banked. The intrinsic complex processes and regulations inhibit the fluent foreign investments, fintech and start-ups incubation and funding, that need to change with the help of process re-engineering and technology.


Statically, as per Pakistan’s Digital 2020 Report published in February 2020, there were 76.38 million internet users in Pakistan in January 2020 which illustrates that the number of internet users has increased by 11 million (+17%) between 2019 and 2020 and internet penetration in Pakistan stood at 35%. As far as the social media users in Pakistan are concerned, the number has increased by 2.4 million (+7.0%) between April 2019 and January 2020 which shows that there were 37.00 million social media users in Pakistan in January 2020 and the penetration rate stood at 17%. The number of mobile connections increased by 9.6 million (+6.2%) between January 2019 and January 2020. Surprisingly, the number of mobile connections in Pakistan was equivalent to 75% of the total population in January 2020.

Aiming towards more picturesque “digital ecosystem”, financial institutions need to concentrate on the following areas to cope up with the above statistics that are constantly on the rise:

  • Digitalisation of banking models
Evaluate and re-engineer the aged processes within the organisations while improvising the relationship with third parties. Banks need to work on pragmatic digital banking models and build more effective business continuity plans for sustainability.

Reposition and optimise branch network while providing more self-services to customers as intimidating branch environment keeps the customers off from the branches, hence to provide them with more self-service digital channels and secure banking at their fingertips.

Not to be surprised as Russia’s largest bank, Sberbank, is embarking on what it calls the biggest transformation in its history, as it unveils a suite of new technology products in an aggressive drive to enter the lucrative Big Tech sector and has dropped the word “bank” from its corporate building and is now called “Sber” while replacing its tellers with super ATMs and offering online taxi and food services.
 

ghazi52

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  • Build platforms, not just products and services

Let go of “legacy” technology and gradually move towards secure green banking adoption while providing financial services to customers anytime, anywhere and on any device. The banks are still clinging to their legacies and need a two-pronged strategy to rip-and-replace the legacy and adopt new technology and tools to thrive.

Open banking with fintech firms is the sustainable model for banks as today quite a few banks are also divesting some of their capital into other businesses. Digital platforms are the answer to such experiments while initiating new services or collaborating with other businesses.

  • Data as a value generator tool

Create and promote “data driven” financial services based on artificial intelligence (AI) algorithms defined with the regulatory guidelines working with structured and unstructured data to provide clear and in-depth insight of your customer from both behavioural and compliance perspective. This domain is still untapped in almost all the local banks, while only a few have embarked this journey.

Data works as fuel to the business and financial services that take the banks to the next level. This is the differentiating factor that is inhibiting the local banks from innovation as compared to peer countries who have worked hard on their data strategies and programmes and are reaping the fruit today.

  • Enter the cloud and managed services evolution

Using on-demand cloud computing to reduce operating costs while increase the availability to 99.XX% as many banks already have steered their staff collaboration over the cloud during COVID-19 work from home (WFH) safety measure. Investments in cloud infrastructure and Software-as-a-Service (SaaS) are visible in the past few years, however, more conducive regulatory guidelines are to be formulated for such ventures.

  • Security by design

Cybersecurity comes a part and parcel of all processes based and data driven technology. Essentially, customer do desire fast and secure financial services. Security spends will remain on the rise with the increase in the ransomware attacks. While WFH and online transactions will keep rising as per experts, the dark side of the digital and online banking will remain to be active more than ever.

The combat against phishing scams and schemes, security breaches, illegitimate transactions, has taken a paradigm shift in the banking sector as treasure trove of data is readily available to the hackers to activate their goals. Effective implementation of DDoS, intrusion, threat and malware detection tools, multi-factor authentication (MFA), restricted WiFi usage would somewhat secure.

  • To B or not to B

The controversies of blockchain technology and cryptocurrency have blemished the true essence and value of blockchain, hence still being subject to skepticism, carries a huge potential for non-financial transactions between the financial institutions and other stakeholders. As per Statista, the blockchain market value share of banks is 29.7% in 2020.

The non-financial avenues for blockchain revolve around asset management, trade finance, supply chain finance, anti-money laundering (AML), combatting the financing of terrorism (CFT), know your transaction (KYT) tracking etc.

European Commission is to launch its blockchain regulatory sandbox in 2022. Countries across all regions are already using blockchain in multiple areas and segments of their public sector.

  • Up your skills to scale up

Traits like critical thinking, ideation, innovation are a must-have in the upcoming builders of the nation, especially those contributing towards recuperating the country’s economy. The digital and tech teams of the banks need to “think out of the bank” to create more financial synergies with the outside world.

The future for Pakistani banks is quite lucrative and auspicious to thrive and serve in the vast digital landscape of the country and beyond as the people are now financially quite literate, the regulators are also inclusive and adaptive and masses have mostly adopted the digitalisation aspects of life.

About the author

Samina Rizwan is a veteran IT professional, having been working for the past 25 years across various industries and organisations as a technologist. Her current role is enterprise architect at United Bank Ltd.

Keen observer on the current and future states of “digital transformation” needs and corresponding “technology ecosystems and responses”. Candidly shares her insights via articles and views on LinkedIn and the FinTech Futures website.
 

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New central bank rules push Pakistan’s banks towards digital payments

Written by Ruby Hinchliffe
18th March 2021

The State Bank of Pakistan (SBP) has introduced a new series of rules for banks in a bid to push them away from manual processes and towards digital services.

The rules cover both the banks’ customer-facing offerings, and their internal operations. They require every bank to house a set of minimum services via their internet banking and mobile banking channels.

As well as calling for each bank – if they haven’t already – to create a chief digital office (CDO) role.

All Pakistani banks will need to provide debit cards to users who don’t already have one
The SBP hopes the new rules will nudge banks to use more digital platforms when settling transactions.


Minimum requirements

In a circular, the SBP lists the exact minimum requirements for banks’ digital banking suites.
They include “bill payments, funds transfer, beneficiary management, limit management, credit and debit card management, [and the ability to] stop [a] cheque payment.”

As the SBP points out, end-to-end payment digitalisation won’t work if banks only allow their customers to make transactions to recipients registered with that same bank.

Which is why the rules stipulate customers should be able to make online payments to a maximum number of billers.

The central bank also specifies that “banks will not levy any activation, subscription or annual charges on their customers for using such services”.

It hopes that removing online fees will speed up the country’s adoption of digital banking services.

All Pakistani banks will need to provide debit cards to users who don’t already have one – unless they don’t want one.

This allows banks and microfinance banks to replace customer authentication via paperwork and signatures, with chip-and-pin cards and Two Factor Authentication (2FA).


A sea change


With some 216 million inhabitants, over half of which are unbanked, Pakistan is still in the embryonic stages of digital banking disruption.

Fintechs are emerging in the region to speed up digitalisation. Fintech start-up Oraan focuses on digitising a more than millennia-old financial concept – ROSCAs, or rotating savings and credit associations. Such “committees” are popular in India and the Caribbean, as well as Pakistan.

Whilst SadaPay, a Pakistan-based digital wallet, is hoping to emulate the success of Indonesia’s super app Gojek.

“I am excited by the prospects of digital payments in Pakistan,” Gojek’s former chief technology officer, Jon Sheppard, said last July. “I see the digitisation of payments as still in its infancy.”

Despite the SBP unifying QR payment standards across the country in 2019, and the launch of a new instant payment system in January, the market is still in its early stages.

“Mandating interoperability of QR payments was a watershed moment in Pakistan,” SadaPay’s founder Brandon Timinsky told FinTech Futures in May 2020.

“It’s the perfect regulatory conditions, with a bunch of legacy competitors.”

The SBP’s latest initiatives are only the beginning. It confirms there is more to come to ensure banks maintain comprehensive digital banking offerings for the foreseeable future.
 

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China, Pakistan can promote digital economy under CPEC

BEIJING: High-level and high-quality cooperation between China and Pakistan could boost the sharing of technologies and experience of the digital economy.

It will also facilitate the building of a community of digital economy under the framework of the China-Pakistan Economic Corridor (CPECD), said a Chinese scholar Prof. Cheng Xizhong, according to China Economic Net (CEN).

Cheng Xizhong stated that Pakistan is known as the land of opportunity as it has tremendous and unmatched potentials. While technology-enabled innovation is the major spur to productive growth, rapid advances in technology are enabling new business opportunities.

As in the case, Pakistan`s efforts on the digital growth path will improve the business environment, attract domestic and foreign investment, and accelerate the development of the national economy.

As he pointed earlier, it was the right choice to go ahead with “Engage Africa”. Prof. Cheng reaffirmed that Pakistan’s commitment to the development of the digital economy is another right choice. One right choice after another entails the wisdom and correctness of the policies made by the Imran Khan administration, which gives Pakistan great hope for fast economic development.
 

ghazi52

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1/ Under PM’s vision of #DigitalPakistan, the Planning Ministry today launches #iPAS (Intelligent Project Automation System). iPAS has been launched for online submission of PC-I(s), #PSDP budget formulation, execution, funds management and for monitoring & evaluation of projects


Image

Asad Umar



2/ Formal training of federal and provincial Ministries / Divisions / attached departments’ personnel have been conducted.


1625165830968.png





3/ The #PSDP of current financial year has also been formulated through #iPAS. All federal Ministries / Divisions and provinces would now be digitally connected with the Planning Ministry.
 

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I am heading digital for a multinational publishing house in Pakistan and a lot of things are also being done in Ed-Tech as well, unfortunately due to technology and infrastructure constraints most of the work is being done in B/B+ onwards market, hopefully with times to come this will change
 

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1628373497439.png




Pakistan Television Corporation - PTV goes High Definition - HD


1. High Definition Transmission
2. Upgraded Equipment
3. State of the Art Sets
4. Complete HD Rebranding, Graphics and Packaging
.


1628373591916.png
 

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Pakistan to benefit from China’s digital economy

September 8, 2021





China’s digital economy has seen unprecedented growth, as highlighted during the ongoing China International Digital Economy Expo 2021, which is being held in Hebei Province. The country’s digital economy has been the main driving force for production, investment, consumption and trade in the first half of the year, registering a growth rate of over 20%. Under CPEC, Pakistan and China are also working to cooperate in digital economy as President Xi Jinping has also proposed Digital Silk Route.

China’s digital economy continued to gain momentum in driving production, investment, consumption and trade in the first half of the year, according to a report released during the China International Digital Economy Expo 2021, which opened Monday in north China’s Hebei Province.

A number of core sectors in the digital economy registered a growth rate of over 20 percent in the first six months of the year, including electronic information manufacturing, software and information technology services, said the report issued in the provincial capital of Shijiazhuang.

The digital economy represents a new form of production and leads the way in economic development, representing a new highland of global technological innovation, said Xiao Yaqing, Minister of Industry and Information Technology, when addressing the opening ceremony.

Covering a total display area of 50,000 square meters, the China International Digital Economy Expo 2021 is scheduled from Sept. 6 to 8 and has attracted 468 enterprises.—
 

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The IPG will pave the way for financial inclusion and payment digitalisation, which is a sub-component of the nine pillars of the e-Commerce policy.

A consultative session was held with all the relevant stakeholders to identify gaps between payment solutions available domestically and its integration with the international payment gateway solution providers to promote e-commerce.

The adviser on commerce briefed the participants about the current digital financial landscape in the country.

SBP Governor Reza Baqir outlined the steps being taken for the financial inclusion of the domestic banks.


The federal minister for IT and telecom assured full facilitation in the provision of enabling environment to the service providers as needed under IPG.

Tarin directed to follow the best international practices and devise a way forward for implementing international payment gateway, ensuring transparency and due consultation with the key stakeholders both in public and private sectors.

The finance minister constituted a four-member committee headed by the commerce secretary and comprising representatives from the Ministry of Commerce, Finance Division and FBR.

Tarin also directed to seek input from the president of the Pakistan Banking Association (PBA) and leading market players from the private sector to understand their requirements and present a framework for further deliberation after four weeks.

In his concluding remarks, the finance minister said the government will be the facilitator and a regulator in a journey towards implementing IPG.

The establishment of an international e-payment gateway will improve the consumers’ confidence in e-Commerce through global connectivity.

Federal Minister for IT and Telecommunication Syed Amin-ul-Haque, Adviser on Commerce Abdul Razak Dawood, NITB CEO Syed Hussain Abbas Kazmi, Commerce secretary, senior policy analysts and other senior officials participated in the meeting.

State Bank of Pakistan (SBP) Dr Reza Baqir joined the meeting through a video-link.
 

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On 2 November, One Network signed an agreement with Mastercard in the presence of DG FWO at the Pakistan Pavilion at Dubai Expo 2020.

This collaboration aims to integrate the smartphone app of One Network with the digital payments infrastructure of Mastercard. Motorway users will now be able to use this app to recharge their M-Tag account at any time using any debit or credit card.



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E-Commerce vital for employment generation and economic growth – PM


Group CEO of Daraz (online E-Commerce platform) Mr. Bjarke Mikelsen called on Prime Minister Imran Khan.

While welcoming Mr. Mikelsen, the Prime Minister stated that Pakistan offers huge potential for E-Commerce that will generate employment opportunities and help in economic growth.

The Prime Minister said that the Government is providing full support to foreign investors under the “Ease-of-doing-Business” policy.
CEO Daraz expressed interest in further investment and expansion of e-commerce in Pakistan.

Advisor Finance Mr. Shaukat Fayyaz Tarin, Chairman STZA Mr. Amir Hashmi, Senator Aon Abbas Bappi, MD Daraz Mr. Ehsan Saya and Mr. Emmad Khan from Daraz were present during the meeting.
 

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Digital platform launched for farmers

The Newspaper's Staff Reporter
December 1, 2021

Foreign Minister Shah Mahmood Qureshi has said that the fast-evolving developments in technology is impacting economies around the world and digital interventions are needed in the agriculture sector to enhance productivity.

He was speaking at a ceremony held here on Tuesday to launch Khushaal Watan platform designed to digitally help the rural community and farmers.

The platform has been designed by Telenor Pakistan to digitally help the rural community and farmers and empower the agriculture ecosystem in the country.

Mr Qureshi said that agriculture was the largest contributing sector to Pakistan’s exchequer while employing half of the country’s labour force.

“This sector has great potential that can be harnessed through digital interventions,” he added.

The Khushaal Watan platform was an intervention to ensure progressive and sustainable growth of the economy by enhancing productivity and contribution to the national exchequer.

It was highlighted that the agriculture sector contributes around 24 per cent to the gross domestic product (GDP) of Pakistan and accounts for half of the total labour force in the country.

The Khushaal Watan platform is equipped with features, such as live video calls with experts in and out of the field, ranging from livestock experts to medical and legal experts to help the rural community.

Published in Dawn, December 1st, 2021
 

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