Monday, September 20, 2021

FinTech–shaping the future for the better (Part-II) - Pakistan Observer

Last updated Wednesday, September 8, 2021 20:14 ET , Source: TopWireNews

THESE Banks still employ outdated systems and have failed to evolve. They have not graduated into 21st century tech-wise. Therefore, incumbents are in a vulnerable position to lose to an innovative, challenger bank.
Unbanked population is larger than Germany’s total population. Opening a bank account with incumbents for youth (75% of Pakistan’s population is under 35) and women (50% of Pakistan’s population) is filled with impediments and takes on average 30 days to successfully open a bank account.
For youth and women (mostly housewives), the main impediment is to show proof of income before beginning the process of opening a bank account. This has led to a huge portion of the population being unbanked (80% or 100 mln).
With a history of 70 years of Banking in Pakistan with 30+ banks operating throughout the country, brick and mortar banks have failed so far to scale up and make banking easy and available to the people. The banking sector needs a game-changer and FinTech appears to be just that.
Technology can scale up and fill this void. FinTech will play an instrumental role in the Government of Pakistan’s initiative of financial inclusion and digitalization of the economy.
Why hasn’t anybody solved this problem so far?Despite the complacency of incumbents, much could not be done to operate like a FinTech in Pakistan before 2019.
To function as a bank or a microfinance bank Minimum capital requirements were very high (50 mln USD).
State Bank implemented the EMI...

Read Full Story: https://pakobserver.net/fintech-shaping-the-future-for-the-better-part-ii/

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