There’s no doubt Pakistan’s banking is moth-eaten where the same set of uncles push on the same set of worn-out products in a new package while patting themselves on the back during their launch ceremonies. Lucky for the media, they pay decent money to get those useless press releases out as well. Everyone except for the customer gets something, who by now has pretty much accepted that it’s futile to have any hope from these organisations for a half-decent experience.
This is why so many jumped to Electronic Money Institutions despite their limited offerings. More people are hoping for the upcoming digital banks to disrupt the status quo. But all that obsession with pretty wallets and frontend apps masks the underlying shift taking place behind the scenes.
Over the last few years, the market for banking technology providers has substantially improved and gotten somewhat competitive. First, post Covid-19, most financial institutions were forced to find room for higher budgets in their coffers. According to numbers aggregated by Data Darbar, the total IT spending by 27 banks with complete annual reports clocked in at Rs46.6 billion in 2021, compared to Rs41bn in 2020.
Between 2018 and 2021, IT spending has increased at a compound annual growth rate of 12.77 per cent — almost twice as fast as the overall operating expenses at 6.7pc. Unsurprisingly, this has attracted some names to try their luck in this space, with leading software players entering through consolidation.
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