KARACHI: Pakistan’s banking industry is standing at the threshold of a massive transformation, with experts at the 23rd Future Banking Summit and Expo calling for urgent adoption of digital solutions, artificial intelligence (AI), and stronger cybersecurity. The event showcased innovations that could reshape the country’s financial infrastructure, making banking more efficient, inclusive, and globally competitive.
Moving Towards a Cashless Ecosystem
Speakers highlighted the steady rise of digital transactions, from ATM usage to point-of-sale (POS) machines, since 2020. Faisal Mahmood, head of Digital Public Infrastructure at Karandaaz, noted the “great adoption by the public,” but also stressed the need for banks to encourage customers and merchants to prefer digital channels over cash.
Pakistan, however, still lags behind its neighbors with one of the highest cash-to-GDP ratios. Yahya Khan, Group Head and Chief Digital Officer (CDO) at Bank Alfalah, said the shift to a cashless economy depends on widespread digital access points (DAPs). Many merchants remain hesitant due to perceived transaction costs, overlooking the hidden expenses of handling cash. “We already have nearly one hundred million digitally enabled customers ready to adopt cashless services,” he pointed out.
To advance this transition, Najeeb Agrawalla, CEO of 1LINK, revealed that PayPak will be tokenized by next year, bringing tap-to-pay and card-on-file features for greater convenience. Meanwhile, vendors at the expo displayed new cheque and cash recycling machines, aiming to improve liquidity management even beyond banking hours.
AI: Banking’s Next Big Leap
Artificial intelligence took center stage as the logical progression of digitisation. Fazal Rehman of Diebold Nixdorf estimated that “95% of teller transactions can be automated.” Shariq Mubeen, CDO of Meezan Bank, added, “I don’t see any function, any area in the bank where you can’t apply AI.”
While automation could make many roles redundant, industry leaders agreed that employees can be retrained and redeployed. Faysal Bank’s CDO, Aminur Rahman, compared AI adoption to the arrival of ATMs, which changed but did not eliminate the role of tellers.
Dr. Aneel Salman, Chair of Economic Security at the Islamabad Policy Research Institute and a member of the National AI Policy Committee, warned that AI’s benefits will only last if deployed ethically and strategically. He highlighted AI’s potential to approve loans faster, prevent fraud in real time, and personalise financial services. According to him, AI-driven underwriting alone could save banks up to $31 billion annually worldwide.
National AI Policy and Fintech Innovation
Dr. Salman linked Pakistan’s National AI Policy directly to banking reforms. He explained that fintech sandboxes could accelerate AI-based credit scoring, while training bankers in AI would prepare them for finance and machine learning integration. The policy also envisions stronger cybersecurity, better risk modeling, and smoother public-private partnerships for remittances and microfinance.
He stressed that AI-powered infrastructure could cut risk simulations “from weeks to hours,” while global AI partnerships would align Pakistan’s financial institutions with international standards.
Cybersecurity: The Double-Edged Sword
As banks embrace AI, experts also warned of its risks. Kashiful Haque, Country General Manager at CISCO, said AI could be used to hack systems within minutes. “There are never enough cybersecurity exercises or investments that can be made,” he cautioned.
Solutions on display included bank cards with dynamic CVV technology from Toppan Security, which changes the verification code with every transaction to prevent data theft. Yet, challenges like phishing remain, as they exploit human error rather than system weaknesses.
Challenges on the Road Ahead
Despite the optimism, hurdles remain. Encouraging merchants in smaller markets to adopt POS systems will take time, as will addressing fears of taxation and transaction costs. Connectivity issues in remote areas also pose a challenge.
On the AI side, banks must first apply it to internal operations before scaling to consumer-facing services. Regulations will also be needed to ensure employees displaced by automation are reskilled rather than replaced.
A Digital Future Within Reach
If executed carefully, the innovations discussed at the summit could bring Pakistan closer to a cashless, AI-empowered financial system. By balancing technological progress with training, regulation, and ethical safeguards, Pakistan’s banking sector has the potential to stand alongside global players on the digital stage.
The journey will be gradual, but industry experts agree: the future of Pakistan’s banking is digital, and the time to act is now.
