How can Fintech Transform Pakistan’s Financial Future for the Better?
Are you new to Fintech (Financial Technology) and wondering what everyone is talking about? Well, don’t worry this article will help you get started.
So what is it?
Fintech has a very simple purpose. It uses technology to provide innovative financial products and services to customers. These help them manage their finances in a faster, more convenient, and often cheaper way.
So it is like a commercial bank?
Fintechs operate digitally and have no physical existence like commercial banks. Some of them are banks while others have other functionalities as well. Some of the services by fintech firms include:
- Storing and transferring money
- Investments and savings
- Buying insurance
- Cryptocurrency trading like bitcoin
- Managing and trading stocks
- Billing and payments
How can fintech impact Pakistan?
Every commercial bank operating in Pakistan has an internet banking setup. Customers can make transfers and pay utility bills without paying a fee. Yet, many people still use traditional banking practices. Some are reluctant to change and others do not know how to use these services.
Those who do use internet banking, still have to end up waiting or paying for some services. For example, customers need to call their bank to make an international transaction or before traveling abroad.
Pakistan is a cash-reliant economy at the moment. Fintech is a growing industry in the local economy. With some key players already operating for as long as a decade, some new ones like SadaPay and NayaPay have joined the league.
Digital financial services are stepping up the game by providing these services in a faster, more convenient, cheaper, transparent, and more secure way. COVID-19 has highlighted the need for digitization of payments more than ever. Fintech can also play a massive role in empowering people and improving the financial future of Pakistan.
Let’s have a look at some essential factors.
Greater financial freedom for all
If you go to a bank to open an account, there is a lengthy process. Many banks need a strong credit history or income, to begin with. Then there are those dreadful forms you need to fill. After completing all the requirements, you get a bank account. Some banks aren’t welcoming toward the low-income earning class either. These issues often discourage the poor from opening accounts at banks.
In Pakistan, broadband and 4G users are increasing with an increase in smartphone users. This makes digital solutions preferable among the masses. JazzCash and Easypaisa are popular choices. These services are making the masses tech-savvy.
They are also giving them financial authority and freedom. This is the most wonderful advantage of fintech. It enables all regardless of background or class. Moreover, it isn’t very easy for women to get an account without a male guardian. Yet, there are many female entrepreneurs running businesses or looking to start one. For them, fintech is a preferred choice for running their business.
2. Small and medium enterprise
Customers are preferring ease, saving time, and becoming more adaptable to shopping online. This has led to a rise in e-commerce businesses in recent years in Pakistan. Those operating on a small scale resort to fintech solutions for refunds and payments. So, fintech is playing a part in enabling small businesses to operate seamlessly and encouraging more to enter the economy to become future leaders.
Owing to this financial inclusion, fintech can contribute to GDP growth as investment and borrowing reach this segment of the economy as well.
Better customer experience
Fintech firms offer user experience customized for you. These services get information firsthand from customers or potential customers, free of cost. But, this data is worth a lot more to these services. You see, it helps them determine customer preferences based on customers’ activity, demographics, and interests. They can then use this information to customize their products to offer a better user experience.
- Getting more for your money
Since fintech companies operate digitally, they pass down their cost savings in the form of better customer service and rewards. Customers have better accessibility to money wherever they go. Traveling can be cashless and hassle-free. When on vacation you do not need to worry about unfair exchange rates or carrying a lot of currency.
Many financial services provide benefits to customers in contrast to banks. You pay through your card and if needed withdraw money from an ATM at a lower exchange rate. Many services even offer commission-free withdrawals. They allow customers to trade stocks without paying a hefty brokerage fee. Digital payments allow massive flexibility to customers in terms of how they use their money.
2. No FOMO
Do you keep a check on your wallet because you don’t want to miss out on spontaneous plans? Yes, we understand FOMO. The good news is that with fintech, you can stay on-trend, commute, go with the flow and socialize as you please without having to worry about cash. Fintech offers convenience to schedule your payments, keep track of your money, and transfer money to others using their username, phone number, or CNIC instead of complete bank details.
In short, fintech has the potential to help economic growth due to its inclusive services, provide convenience, better customer service, more financial freedom, and a simple and secure way to manage your money with a tap.
How is fintech looking so far? Leave a comment.