SBP hosts discussion on digital banks

KARACHI: The State Bank of Pakistan (SBP) hosted a discussion on digital banks with the objective to share information on SBP’s licensing and regulatory framework for digital banks, a statement said on Saturday.

The webinar was aimed at sharing the broad contours of SBP’s initiative and the experiences of other international players.

The discussion began with a keynote address by SBP Governor Dr Reza Baqir, followed by an interactive panel discussion with well-known international experts in the fields of digital banking and fintechs.

Baqir, in his keynote address stated that with major digital enablers and fundamental components of a digital economy in place, Pakistan is now well set for a major digital evolution.

He emphasised that a key goal behind the SBP’s framework for digital banks is to promote financial inclusion and innovation in the country and provide an ecosystem where customer and customer service is prioritised.

He highlighted the challenges and gaps in the existing banking space and mentioned that the SBP has laid a solid foundation for the provision of digital financial services by providing the legal and regulatory environment and core infrastructure.

Baqir also spoke about the steps taken by the SBP to promote innovation in the financial services, including removing of barriers to entry for non-banks and fintechs, frictionless digital account opening for individuals, in-app biometric verification to facilitate customers’ digital on-boarding, and introducing Pakistan’s Instant Payment System, Raast.

Important initiatives are under discussion with the stakeholders on Common Know Your Customer framework, which will enable financial institutions to share KYC information with customer consent, to improve customers’ digital journey and open banking, he added.

The event also included a panel discussion moderated by The Rayn Group Co-founder Tania Aidrus, with Monetary Authority of Singapore (MAS) Chief Fintech Officer Sopnendu Mohanty, ONE Incoming Chief Executive Officer Omer Ismail and Kleiner Perkins Managing Member and General Partner Mamoon Hamid as panelists.

The panelists highlighted the real potential and opportunities of digital banks globally for international players including fintechs, startups, venture capitalists etc. and deliberated on various aspects of the regulatory challenges.

They highlighted that innovation in the financial sector is largely led by the combined efforts of a regulator and other relevant players, appreciating the flexibility of ‘SBP’s Licencing and Regulatory Framework for Digital Banks’.

The panelists were of the view that the incoming players can benefit from opportunities presented by Pakistan and make a tangible and significant increase in meaningful financial inclusion.

The panel was confident that digital banks will become an essential part of the financial ecosystem and provide people with the access to a wider range of financial services, and advance the broader agenda of financial inclusion.