In order to promote digital banking and technological solutions in the banking and financial sector, the State Bank of Pakistan (SBP) has made a plan to establish state-of-the-art facilities, including technical and regulatory sandboxes and innovation offices in major cities during the next five years.
In its 5-year strategic plan, the banking regulatory revealed its ambitious plan to adopt the latest trends of technologies in the banking and financial sector to promote the digitization of banking services; to facilitate and provide guidance to existing and new market players; and to explore the use of innovative technologies, such as Distributed Ledger Technology (DLT), Artificial Intelligence, Machine Learning in digital financial services.
The banking regulator in its strategic plans explained its prime objective for the establishment of these entities is the digitalization of the economy for stimulating economic activity and growth in a country.
The role of central banks around the world is evolving due to the emergence of new technological advancements particularly in the area of artificial intelligence, blockchain technology, cloud storage, fintechs, and big data.
These technologies have posed multiple challenges for the central banks on the regulatory and supervisory front and are expected to completely transform the traditional roles of banking and finance in the economy. Central banks have to adapt to these technological changes through a structured transformation of their organizational infrastructure and systems to strengthen their roles as regulators.
In implementing its Vision 2020 strategy earlier, SBP laid the foundation for the development of a financial ecosystem that would nurture and promote digital financial services. In this regard, a secure, efficient, inclusive, and innovative payment system is central to the digitalization of economic transactions; hence RAAST came with to address multiple payment gaps.
Now, to further enhance the digital financial services landscape, SBP intends to strengthen the governance framework, encourage technological advancements, particularly for remittances and payments, promote digitization of government payments and receipts, reduce currency in circulation through digitization, improve the oversight framework of payment systems, and create awareness to mitigate risks in the use of digital financial services.
SBP will also upgrade the oversight framework for payment institutions to enhance financial and systemic stability, consumer protection, and digital adoption. It will also upgrade data acquisition, analytical, and dissemination mechanisms by implementing state-of-the-art regulatory and supervisory technologies and establishing frameworks to proactively monitor, detect, and respond to cybersecurity threats to protect the critical digital infrastructure of the financial sector.
The strategic plans further stated that the SBP will collaborate with the federal, provincial, and local governments to digitize their payments and receipts. The financial watchdog will take active measures to replace the use of currency with digital means. Also, It will enhance legal, regulatory, and governance frameworks to promote the wider adoption of digital financial services strengthening collaborative mechanisms between stakeholders.
SBP should first check it’s own National Savings branches before making any funny claims. Even to date you can’t transfer, pay bill and neither there is any option to download WHT certificate from their app.
National Savings are not branches of SBP. The CDNS and SBP are separate institutions.