All over the world, the finance industry is witnessing a new trend as banks are transforming their business models as fintech operators. Previously, it was the other way around , shared Mohammad Yasir Ilyas, the head of one of Pakistan’s leading money management app Hysab Kytab.
He said this while moderating a webinar series titled Tech Talks held by Jaffer Business Systems, where fintech heads and finance experts discussed financial inclusion, digitization and Pakistan’s untapped potential in the financial sector – fintech: which can capture niche markets through innovative, tech-enabled, and easy-to-accessible services.
Mr. Ilyas claimed that the support of regulators was essential for fintech operators and financial institutions in order to introduce various initiatives in the market. According to Mr. Ilyas, in the last two years, the support from regulators has been positive which has led to the growth of fintech business in the country.
Given the current financial setting, in the next five years banking will become a common service in Pakistan and worldwide. Financial literacy and awareness play an important part in making people feel comfortable using services offered by fintech operators.
“The mobile phone penetration is exceptional — from 70% to 80% in Pakistan, but the penetration of banks stands merely at 20% which provides a big opportunity for fintech to come into space benefiting from mobile penetration to launch their products and services,” said Areej Al Medinah, Product Owner at SadaPay.
She added that financial inclusion was a wide phenomenon which should offer its user access to the financial system even without a bank account for basic services and a variety of products and services with a bank account.
The services should be easy to navigate, sustainable and affordable for a wide segment of the customers who can be empowered to make the most of their bank accounts.
“Bank accounts are not a privilege. They are a necessity which should not be based on red tape. Fintech companies do swift processing without excessive documentation as compared to traditional banks,” she explained.
“Fintech operators provide easy access to customers to open bank accounts or have a transactional card in a short span of time as compared to traditional banks with the involvement of a lot of processes and compliance. In this way, the role of fintech is tremendous in promoting digital transactions and financial inclusion in the country,” Ms. Al Medinah further said.
Elphinstone Founder and CEO Farooq Tirmizi believes that the phenomenon of financial inclusion could be promoted at an accelerated pace in Pakistan through the regulator’s plan and that competition should not be intensified between banks and fintech operators but between these entities and different sectors such as real estates.