The Future of Banking in Pakistan: Upcoming Trends and Innovations

Over a span of few years there is a significant shift in the behavior of bank customers towards Digital Banking in Pakistan, primarily due to the ever evolving technological advancement. Social media platforms have transformed the idea of purchasing in Pakistan with individuals opting to shop from the comfort of their homes. This has added to the increased need of digitizing financial services. Although, a large number of customers prefer COD (cash on delivery) options, however, there is a constant and steady increase in the trend of Digital Financial Services by internet users.

With the passage of time customers are becoming more cautious in terms of carrying money and are constantly opting for ways to use technology while making transactions. This has further played a significant role in urging Banks in Pakistan to set their sails for a change of direction, that is driven by technological advancement, to cater to the demands of their customers.

Digital transformation is the future of banking industry in Pakistan, banks will incorporate AI and Blockchain technologies to improve security, transparency, and operational efficiency. Blockchain application in banking enables asset tokenization, such as real estate, stocks, and bonds allowing fractional ownership and easier transferability. Furthermore, blockchain technology can be used to know the customer well and provide need based solutions.

Whereas, AI in banking and finance can leverage improved employee and customer experiences, refining the overall performance of back office operations. It is imperative to mention here that banks will be benefiting from cost reduction, improved fraud detection and regulatory compliance.

Additionally, Fintech companies in Pakistan can play a pivotal role, by developing collaborative platforms that offer smooth and personalized financial services. The commencement for open banking has redefined the industry by allowing secure data sharing and developing a more competitive market. Mobile banking is next in line and is expected to dominate, with banks focusing on developing intuitive and user-friendly apps to cater to the tech-savvy population.

Another trend that warrants attention is the growing focus on financial inclusion around the world, banks offering affordable digital solutions to extend services to the unbanked and underbanked segments. More banks are focused on developing financial products and services that are technology driven. These digital solutions include digital wallets, online platforms and mobile banking. By tapping in to these segments banks in Pakistan will be able to reach out to underserved rural areas of Pakistan as well.

There is an increase in emphasis on sustainability in the banking industry. Although, banks in Pakistan are adopting Green Financial services but there still remains a gap in the industry. Pakistani banking sector can foster Green Banking by funding environmentally friendly projects such as training and education, renewable energy, energy efficiency, and sustainable agriculture. Banks are also promoting practices that reduce their environmental footprint. This will mean improved climatic and environmental conditions. This idea is only possible if the banks continue to develop digital services for the banking sector in Pakistan.

Similarly, the usage and application of Big data analytics will equip banks to understand consumer behavior in order to provide personalized banking experiences, leading to enhanced customer loyalty. While these trends continue to develop, it will be prolific for Pakistani banks to remain innovative and agile to address the evolving customer needs in order to maintain global competition.