Mashreq Pakistan awaits a green light from SBP to start digital banking operations
Mashreq Pakistan is waiting for approval from the State Bank of Pakistan to launch digital retail banking operations as the bank is eager to capitalise on the exceptionally dynamic country's market driven by sheer youth, tech-savvy populace, and the expanding trend towards financial digitalisation, the chief executive says.
“We have made significant progress towards achieving our digital retail banking license from the State Bank of Pakistan and are now at an advanced stage of the process; in-principle approval has been received, and Mashreq Pakistan is now a registered entity,” CEO Mashreq Pakistan Muhammad Hamayun Sajjad told The News in an interview. “We are closely collaborating with regulatory authorities to ensure full compliance with their guidelines and our aim is to commence operations soon once we receive the final approval,” he said.“The exact timeline is subject to regulatory processes, but we're optimistic about launching our digital retail banking services in the near future,” he added.
Five players, including Mashreq Bank, received inprinciple approval from the SBP in September 2023, which allowed them to get ready to introduce digital financial services in the cash-heavy nation. Four other banks were granted approvals: HugoBank, KT Bank Pakistan,Telenor Microfinance Bank, and Raqami Islamic Digital Bank. “As a leading global financial institution in the Middle East and North Africa (MENA) region and an international digital leader, Mashreq is excited to announce its foray into Pakistan,” Sajjad said.
To provide a more comprehensive understanding of the bank's digital banking direction, he advocated introducing a concept he refers to as "Digital Darwinism." This concept reinforces the importance of adapting to technological advancements. Citing the SBP report, he stated that the data for the last six years indicates that financial transactions have more than doubled, primarily driven by digital transactions, with a whopping 82 percent of all total transactions being done digitally. This underscores a massive cultural and technological shift.
According to him, the introduction of digital banking licenses is thus, not just a trend; it is a paradigm shift. Indeed, Pakistan's burgeoning digital landscape - evidenced by the surge in mobile and internet banking to a cumulative growth of 70 percent compared to a mere 15 percent for ATMs - highlights the increasing reliance on technology and subsequently, reinforces the importance of building efficient and seamless digital platforms - one in which Mashreq aims to play a critical role.
The introduction of branchless banking in 2008 was a game-changer for Pakistan's financial sector, providing customers with an alternative way to bank, Sajjad noted. However, the digital banking’ of today in Pakistan is a culmination of a host of products and services squeezed into a small mobile screen with complex technology fabric, layer after layer, added over time, with a significant dependency on the plethora of integrations,” he explained.
It has resulted from various transformational, yet fragmented initiatives, instead of being built from scratch using the first principle of design,” he said.