With the ever-growing community of cellular subscribers in Pakistan, the mobile banking industry has made great strides toward financial inclusion over the past decade, Pakistan has witnessed a remarkable telecom revolution, leading to a tremendous proliferation of cellular devices among the masses. Today, a majority of Pakistan’s population is using a mobile phone and has access to revolutionary connectivity, even in the remotest regions of Pakistan. Utilising the global network of innovative digital facilities, available in Pakistan, the progressive cellular and financial industries of Pakistan, together, have made fascinating breakthroughs in mobile banking and digital transactions to empower people through financial inclusion.

The rising pace of development has given birth to new inventions and discoveries over the past few decades, creating unique experiences that were unmatched in centuries. The mode of conducting business operations across the world, including Pakistan, has transformed completely and next-generation commercial practices and procedures are being adopted, promising amazing agility, benefits and convenience to people. Consumers of today have the power to locate, procure and possess all kinds of merchandise or services, available anywhere in the world, within minutes.

Mobile banking and financial technologies offer instant remittances and bill payment solutions across the world. A wide variety of offerings have already been launched in Pakistan helping customers to make secured, diverse and convenient transactions with their mobile phones. Fin-tech holds immense potential and its scope can be broadened by simply establishing transactional understanding and delivery mechanisms among credible organisations across all industries.

Digital transactions have provided new ease to the ever-growing community of cellular subscribers in Pakistan, helping them to perform everyday tasks instantly, without any hassle. A customer in the digital age does not need to wait in long queues, go through tedious processes and can save his time for more productive tasks.

DIGITAL FINANCIAL SERVICES GAINING MOMENTUM IN PAKISTAN: The huge cluster of 100 million cellular users in Pakistan can act as a critical vehicle for mass communications.

Utilising the global network of innovative digital facilities available in Pakistan, cellular and financial sectors have together made fascinating breakthroughs in mobile banking and digital transactions to empower people through financial inclusion. It’s a whole new lifestyle.

In a country where 60 per cent of the population has mobile phone subscriptions and less than 22 per cent has formalised bank accounts, broad-based mobile financial services offer huge opportunities to expand mobile and branchless banking for accelerating national progress.

In March 2008, the State Bank of Pakistan was one of the first regulators in the world to introduce guidelines around branchless banking. The regulations were designed to encourage banks to be more inclusive in their product and service offerings by rolling out branchless banking services in underserved areas with large unbanked populations.

Since its introduction, the Mobile Financial Services (MFS) market in Pakistan has evolved from a couple of trail blazing deployments, to become a global case study for the MFS industry. Modern-day telecommunication technology has been a significant catalyst for mobile financial services uptake. Through various collaborations, participants have been able to think big, and accomplish superb results.

All the leading enterprises, manufacturing organisations, public-utility companies and financial institutions are rapidly joining this revolution to deliver next-level facilities and convenience to their consumers. Each day, millions of new facilities from across the globe are being added to the vast e-commerce domain.

According to media reports, branchless banking is a powerful medium for financial inclusion. Data shows that branchless banking in Pakistan is generating more than 2.5 million transactions daily, with over Rs. 10 billion in values transacted every day. The State Bank of Pakistan has also set ambitious targets for growth of digital transaction accounts.

To enjoy all the advantages of this global digital eco-system, a customer simply needs a mobile connection, a handset with Java and GPRS support, or a credit-card in some cases, to open an account in one of the participating banks or companies. This digital eco-system has special advantages for a developing country like Pakistan and is providing access to formal banking channels to the vast unbanked population of Pakistan.

HISTORY AND EVOLUTION OF MOBILE BANKING: Mobile banking has evolved dramatically through extensive innovation since its inception. During its formative years prior to 2004, customers used to experience numerous glitches in the operational procedures due to technical issues and insufficient capacity. Eventually, after 2004, when technical inadequacies were eliminated through decades of experimentation and meticulous adaptations, a seamless cohesion was achieved between telecommunication technologies, banking services and retail operations to streamline digital transactions and mobile banking operations.

The mobile banking sector has witnessed numerous pitfalls and innovative diversions throughout its journey. In 1999, the developed nations noticed this promising concept for the first time, when an enterprise named Paybox offered a basic payment solution in Germany, UK, Sweden, Austria and Spain, through its collaboration with Deutsche Bank. Quick and substantial progress was made by Paybox as it registered more than a million subscribers in four years.

Many other resourceful players launched initiatives and pilot projects to create effective mobile banking networks, each one adding more proficiency, security and convenience to this sophisticated eco-system. In 2003, Mobi Pago (Mobi Pay) was deployed through a Spanish initiative and was backed by Telephonica and BBVA. This venture achieved a quantum leap towards the successful implementation of mobile banking. For the first time, it effectively engaged all Spanish mobile-operators, financial institutions and retailers in its network. Therefore, it smoothly delivered unprecedented convenience to its customers all over Spain.

Several other mobile banking operations kept emerging at regular intervals. The popular vending machines installed at the Helsinki airport in Finland, were based on a system created by Nokia. Siemens in Germany, partnered with a resourceful e-commerce company – Brokat to create a broad-based mobile-banking initiative, whereby in 2002, Brokat won a lucrative contract with Vodafone. The superb performance of this project brought more finesse to make digital transaction networks more secure and trouble-free.

Another venture, Trivnet, has had tremendous success in Israel over the years, while Adamtech, another company in the same country, made a series of pilot deployments to offer Cellpay, a highly technical solution to the world. France Telecom launched several ambitious ventures in this regard. One of these French initiatives was backed by a specially integrated card-reading feature in a mobile phone. This solution was technically far more superior and secured than others. So, it gave a tremendous boost to the trust of consumers in mobile banking.

Digital payments and mobile banking industry promises a higher quality of life to the masses. With unwavering reliability and security, this industry has now matured enough to demonstrate paradigm shift, enabling a greater strategic impact on various global industries.

The global volume of mobile-based transactions and e-commerce is thus growing rapidly and its accessibility can virtually delete national borders and place the power of large volume trading, on the palm of your hand.

In order to stay competitive, Pakistan must continue to build a powerful and sustainable platform to support safe and accurate financial transactions using its vast mobile networks. Mobile Wallet is another convenient, secure and instant way to make online payments, providing an innovative solution to facilitate online consumers and merchants.

The e-commerce phenomenon in Pakistan has the potential to grow at 20 per cent annually. This will enable faster financial inclusion and poverty alleviation in the country, and make robust contributions to socio-economic growth. Helping the underprivileged masses to participate in the mainstream trade and business activity can create respectable livelihood opportunities for the masses, while also enabling regulated transactions and documentation of the economy. The underlying notion behind all such inventions is to place the “world” in people’s pockets.

These efforts are fostering a new culture, where financial institutions are placing their trust into the lower segments of society living in rural and remote regions and extending financial assistance to the impoverished but capable segment of consumers. Other important areas where such technology is playing a critical role include education and social services.

While financial inclusion offers endless opportunity for poverty alleviation, global education, mobile-health, mobile-agriculture, and empowerment of the masses, the real question is: how fast can we get there?