Mobile Banking Facilitates People at Large Scale in Pakistan

The emergence of science and technology in our society has facilities everyone including institutions, global organizations, large corporations, and other small and large goods and services business entities.

By Abdul Waheed

Science and technology also helped out the financial institutions of our country at a great extent. With the passing of the time, the entry of mobile banking in the financial institution increased service providing to people.

In addition, mobile banking denotes the usage of a mobile device to carry out financial transactions. The service is provided by some financial institutions, especially banks. Mobile banking is able to make clients and users to keep up different dealings that might however vary conditional on the institution. World Bank defines mobile baking as: “financial inclusion is a building block for both poverty reduction and opportunities for economic growth, with access to digital financial services critical for joining the new digital economy.” Mobile banking also helps people to get the access of financial services in easy and affordable way where they could make out their payments, save and manage their liquid asset accordingly.

Financial institutions’ role in development of the developing countries is plausible. Like the International Finance Corporation is supporting countries that are committed to reach out the 600 million adults by providing services of advisory and investment, on the other hand, World Bank is also helping with the Universal Finance Access (UFA) 2020 by setting Objectives of attracting 400 million adults to the transaction system through specialized financial information. The UFA and World Bank has collectively set a target to achieve 1 billion adults to gain basic need of Financial Services for managing their financial lives and play their role in economy. Furthermore, UFA 2020 initiative focuses on 25 priority developing countries including Pakistan where almost 70% of all financially excluded people live.

According to some facts and figures, there is an immense need of mobile banking in the developing nations including Pakistan to let people access banking products and be part of financial inclusion to update their living style and help economy to prosper.

Undoubtedly, the governments, policy makers and regulators of developing countries are putting their best to formulate the regulations for being benefitted from the sustainable benefits of mobile banking and digitization. But little efforts have been put out to differentiate mobile money and traditional banking.

Yes, mobile banking has earlier been used by the developed and some developing countries but Pakistan started to use this technology since 2005. The State Bank of Pakistan (SBP) in 2005 and 2006 introduced the concept of Mobile Banking in Pakistan. The main purpose to make decisions of branchless banking regulations in 2008 which then revised in 2011 keeping the Know Your Customer (KYC) requirement for Anti Money Laundering measures.

In addition to this, the partnership with EasyPaisa was made in 2009 that appeared as a result of Branch Banking Regulations and Make Pakistan the First Country to formulate such regulations. Later, different corporate sector players emerged in the mobile banking sector in Pakistan such as JazzCash, Zong PayMax, Keenu Wallet, uPaisa account, UBL Omni, and HBL Connect. Speaking in the earning term, Pakistan based startup SimSim, which is a digital wallet solution built by Finja, recently raised $1.5 million in funding. SimSim promises for free real-time payments through an E-wallet account. In simple words, today world over the road of science and technology.

The Access to Finance conducted a survey in 2015 and it was found that the biggest obstacle in financial inclusion is the lack of awareness about the banking products and services. Keeping this proof in consideration, SBP, in collaboration with National Institute of Banking and Finance, launched the National Financial Literacy Program in August 2017 to impart basic financial education to the low income and unbanked population of Pakistan. SBP has also launched the National Financial Inclusion Strategy in 2018 in order to support financial inclusion and economic growth by availing banking products for the nation.

According to UFA 2020 report “the increase in financial access in Pakistan from 2011 to 2017 is 10 % to 21% and among them 7% are female while 35% are male who own a transaction account”. It shows that financial services have reached out to the door of people to reduce the magnitude of their hindrances including lowering the cost making financial transactions. However, female population has more benefitted from it.

Government efforts are also notable in the disbursement of digital Government to Person payments (G2P) that show highlight Benazir Income Support Programme (BISP) which is a social Cash Receipt initiative through which the mobile banking assisted Women receive their social cash securely and conveniently. Not only this, Ehsas Kafalat Program 2021 is also one of the good initiative of the government that is reaching out to poor women and providing them access to receive their cash conditioned through biometric ATM machines. This Government-HBL-Bank Alfalah partnership of the government is fantastic of its kind. Such digitized initiative ensures Pakistan’s progress.

In my opinion, Pakistan’s efforts for financial inclusion of branchless banking have expanded the access to far-flung areas of the country with the financial stability and economic growth perspective. But there is still a huge gap to be bridged by government together with financial institutions like HBL to educate people through different domains. People need to know the importance of these facilities and ultimately become able to contribute to the development of economy as well as guarantee personal growth.

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