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Fintech and Pakistan: an emerging economy

Financial Technology (Fintech) is an exponentially growing space in Pakistan, aiming to replace the traditional financial services, even if not to replace it, its there to create convenience and facilitate people to the utmost making it the primary approach for their transaction.

The Government of Tehreek-e-Insaf has just completing their hundred days in government and have identified many ways they would be using Fintech to implement their policies and plans, one such example is to replicate the health insurance, which they implemented in Khyber Pakhtunkhwa, a health card having coverage up to Rs600,000 creating a mean for every individual to have access to standard health care regardless of his income and providing a chance to live a better life.

Corruption is one of the biggest problem of Pakistan, that has been plaguing this nation and was recently emphasized by Prime Minister Imran Khan on his official visit, Fintech can play a huge role by bringing transparency creating positive impact on the overall economic health of the country.

Pakistan has a financial inclusion ratio of 15%, compared to an average of 33% for lower-middle-income countries while banking sector represents 80% of the financial services but serves only 15% of the population.

Keeping this all in perspective, Pakistan stands at a very interesting point in its journey of development, as it provides an excellent opportunity for Fintech to grow and operate and contribute to the countrys economic and GDP growth.

It is the need of the hour to not only invest and support the local upcoming Fintech in the country but to create an environment conducive to the growth of Fintech in Pakistan.

According to the financial times, hinting at the impact of the new players, McKinsey & Company has laid out the forecast numbers in its report, Fintech will lead to the following outcomes by 2025 in Pakistan. It will create 4 million jobs, new 93 million bank accounts adding $36 billion to the gross national product (GNP) annually and increasing Pakistan governments net revenue by $7 billion.

Mobile wallets, online payments, pre-paid cards, and digital savings accounts are all examples of low-cost financial services that McKinsey Global Institute estimates could add 6 percent to the emerging-market gross domestic product by 2025, a boost equal to the entire African economy: Financial Times.

With the worlds 5th largest young population and an increased usage of internet and smartphones, the Pakistani market shows the potential of adapting to the new financial services introduced by Fintech players like Easypaisa, Jazzcash, Keenu and etc.

According to the data, Pakistan with a mobile penetration of 69%, Pakistan is quickly becoming an economy reliant on mobile phone technology with an extremely rapid growth of 3G and 4G internet, building a whole new generation of digital natives.

As wide the financial net, more people into the banking system, there would be more data points for analysis that would help the institutions as well as the individual to use these services when need be.

A glimpse into the future of the fintech industry
Trends within the financial services industry:

There would be certain trends in the future that will partially if not entirely change the way payments are made with advancements in the Fintech industry. Credit and debit cards will start becoming superseded and the preferred mode of payment will be through mobile wallets. Carrying your mobile phone will become essential for all sorts of transactions. Payment through mobile phones will be incentivized similar to the benefits and point systems for spending on credit cards.

The increase in the consumers base would make the banks and other financial institutions more persuaded to provide more convenience and improved assistance from banking institutions for a seamless user experience.


As banking in Pakistan is fast becoming an all-digital experience, significant efforts and investments are being made to provide banking customers the ability to access their financial information via mobile messaging platforms 24/7.

Online loan services:

Seeking loans or credit is to become a lot more convenient and easier with the growth of online loan service providers. This phenomenon can be especially trending in the auto finance market where customers can get loan pre-approvals and online credit ratings before purchasing a vehicle.

This is already happening in China, as internet giants such as Alibaba and Tencent are entering this market where vehicle finance is arranged on low down payments and flexible low-interest rates online. These alternative online financing solutions are likely to give consumers more flexible financial products with greater ease of payment.

In the coming three to four years this trend will also be adopted in Pakistan as, Fintech companies like Smartchoice.pk, are already offering a one stop solution for consumers to compare multiple financial products like insurance, loans, investment. They aim to simplify the process to search and buy any of these products bringing convenience and facilitation to the entire customer purchase journey.


The much needed marriage of insurance and technology is insurtech a term inspired by Fintech and signifies the amalgamation of insurance with new technology. Insurance is one of the oldest businesses; however, the industry is in dire need of technological innovation, thus making the situation ripe for Fintech companies to step in. Customers no longer value one policy fit-for-all kind of approach, thus leaving a big gap in the industry which Fintech companies are looking to fill by providing more personalized insurance products that do not exploit clients financially.

Fintech companies, when it comes to insurance, are to make a big impact in the coming years. From insurance pricing to underwriting and finally sales, all the procedures involved in insurance are likely to become more efficient and transparent.

The much needed technology driven change in the insurance industry is here to stay and likely to grow exponentially in the form of insurtechs.


All things considered, recent future would see an upsurge in the Fintech play in Pakistan. Traditional banking and financial setups will have to meet the changing needs of customers, which are highly inclined towards digitization of the entire banking process.

Banking and financial set-ups would design more products according to the customer financial portfolio and needs, new products like student credit cards/debit cards that would have special student discounts because they spend a lot of things during their academic years, benefits like these would attract many young adults to be part of the system early on.

Start-ups like Smartchoice would become more prevalent to plan out financial goals and make informed decisions that can be critical to a financially stable livelihood. Another important player in the market would be m-wallets in transforming user behavior and change the way transactions are done today even more.

Fintechs are taking things more hands-on, helping in better decision making, creating more services for people, assisting people in planning out better on their risk, assets, and investment, as the better the education and information a more well-thought decision people will make.

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