Smart Phones: The new age of banking in Pakistan

18th September 2015

 
 

With the growing number of smartphone users in Pakistan, banking institutions are racing to develop internet and mobile applications for financial transactions. The ease of using the internet on the go is finally being adopted by the banking industry for their benefit and to augment the number of consumers banking in Pakistan. How can the use of a smartphone increase the banking sector’s consumer base? What options are available for consumers through their smartphones for banking in Pakistan?

There was a time when the only use of cell phones by banking consumers was to check account balances and receive notifications of debit and credit transactions. Such services were only offered by a few banks and were based on the SMS/text message platform. This form of ‘mobile banking’ was a revolutionary step in banking in Pakistan during that time period. As the number of internet users grew in Pakistan alongside the number of cell phone users, various banks rushed to launch internet banking facilities for their consumers. Any bank which was offering internet banking services to its client base was considered more superior than its competitor. Since cell phone network coverage greatly outweighs the banking sector’s footprint across Pakistan, the use of smartphones for conducting banking in Pakistan was a means of assisting banks in reaching out to rural areas and expanding their consumer base.

Although banks and financial institutions had launched web based models for banking in Pakistan, they were quick in grasping the fact that nearly 50% of internet users comprised of individuals accessing the web through their cell phones. A more detailed analysis proved that a vast majority of these internet-cell phone users were also smartphone users. For this purpose, banks increased their investments in developing models and applications for smartphone users to conduct banking in Pakistan through their cell phones. Although most banks are still working on developing applications (Standard Chartered being the market leader with the launch of their Breeze Mobile Application), internet banking portals are now readily offered by most banks to all their consumers. Banking in Pakistan through the use of smartphones has picked pace as individuals can simply access their bank accounts through the internet services available on their phones.

Though the State Bank of Pakistan (SBP) has restricted the opening of new bank accounts online, basic banking in Pakistan can easily be conducted through smartphones. The core features available are real time fund transfers to various banks, account statements for the last 6 months, utility and cellular bill payments, credit card and loan repayments and detailed viewing of financial transactions. A smartphone user now has the option of mobility whilst conducting his banking transactions. Such solutions have steadily superseded the conventional methods of physically visiting branches for banking in Pakistan.

Given the low level of literacy and technological backwardness of our country, the banking sector has faced its challenge in convincing the masses on the benefits of banking in Pakistan via a smartphone. The old school of thought argued on the safety and reliability of internet banking in Pakistan. Concerns were raised over the threat of fraudulent transactions and the misuse of smartphone banking applications. However, the banking industry has managed to convert a large number of its consumer base to internet banking portals. The initial resistance shown by consumers has greatly been countered by various extensive marketing campaigns and various seminars and forums on the legitimacy of banking in Pakistan through the internet. Most consumers, who switch cell phone usage to smartphones, are also likely to switch to internet banking in Pakistan. The growth in smartphone users has brought about a new era for banking in Pakistan. It was long overdue that our nation catches up with the rest of the world in terms of technological advancements and innovations. The use of smartphones for banking in Pakistan is proving as one of the stepping stones in achieving this aspiration!

 

 
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