Branchless banking is challenging the conventional banking in Pakistan, and State Bank of Pakistan has advised to the conventional banks to redesign their future strategy to survive in the future.
Syed Irfan Ali, SBP Executive Director while speaking at the Pakistan Payment Summit 2016 on Thursday said: “Conventional banks need to re-make their future strategy very quickly.” He also said that the number of physical branches would cross the 15,000 mark this year. “But how long will they be there?” he asked, rhetorically. In contrast, the number of branchless banking agents has crossed the 400,000 mark.
According to the central bank in Pakistan, Nine banks in collaboration with mobile phone service providers are offering branchless banking services. Irfan Ali also revealed that the need for ATMs in the country is almost four times higher than the existing number of machines. Currently, there are 11,000 ATMs in the country, and we actually need some around 40,000 machines in the country.
Qasif Shahid, founder, and CEO of FinJa relayed that many developed countries have transformed from being cash-heavy to cashless, including Norway, Sweden, and Australia. Yahya Khan, vice president at Telenor Easypaisa, said $8 billion worth cash is converting into digital cash every year.
The branchless banking is gaining much momentum in the country and looks promising to change the dynamic of how banking goes on in Pakistan. It sure does has its challenges in Pakistan as around 88pc of Pakistani don’t have access to branchless or conventional banking, but the growing success of mobile banking sure does hints at the demise of conventional banking methods.