SBP welcomes entry of non-banks in payment systems

KARACHI: State Bank of Pakistan (SBP) Deputy Governor Riaz Riazuddin said on Thursday the central bank is facilitating the entry of non-banks in the area of payment systems.

Speaking at Pakistan Leadership Conversation organised by the Association of Chartered Certified Accountants (ACCA), Riazuddin said the SBP has also issued specific rules for payment systems operators and service providers.

“The central bank supports innovation and innovative ideas,” he said, adding that favourable policies by the banking regulator have resulted in the strengthening of alternative delivery channels, like ATMs, point-of-sale machines, e-banking and mobile banking.

As per the latest figures available on the SBP website, the number and value of the transactions processed in the second quarter of 2017-18 rose by 8.6 per cent and 28 per cent from the preceding quarter, respectively.

Riazuddin’s address focused on ethics and technology and their impact on the economy and business. “It is a challenge for our country to emerge as competitive without compromising on ethical standards. The emergence of the internet and internet-enabled technologies has been a catalyst for this change with the free flow and exchange of information as a primary motive,” he said.

The SBP deputy governor said non-banks are increasingly foraying into the domain of conventional banks. “Fintechs, which are usually small startups, are using technology to challenge banks and other financial industry stakeholders in providing innovative financial services. Technology offers opportunities, but it also presents challenges to the providers of financial services,” he added.

He highlighted the fact that technology presents “very unconventional challenges” that pertain to electronic identification, data privacy and cybersecurity. “The more a financial system depends on an electronic platform and digital records, the more susceptible it is to cyber attacks,” he said.

The SBP has not only taken measures to reap the benefits of technology but also to ensure the safety of the system and the trust of customers, he added.

The development of robust payment systems and expanding financial inclusion are two of the key strategic objectives listed in the SBP Vision 2020, he said. “The SBP has already initiated a number of priority policy interventions with a focus on the growth of digital payment channels as well as customer protection,” he noted.

Speaking on the occasion, Head of ACCA Pakistan Sajjeed Aslam said the international body of accountants is known for promoting ethical businesses and growing economies.

“Pakistan ACCA members have committed to driving 7 per cent GDP growth. This will bring up the ranking of Pakistan to the top-50 countries in terms of the ease of doing business and global competitiveness index in the next five years by collaborating with the government and private sector,” he said.

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