How digital are existing banks?

Fintech has been one of Pakistan’s brightest spots of late, with not only triple-digit growth but progressive regulatory initiatives such as Raast. Another example is the five upcoming digital retail banks, which recently got their in-principle approvals and have the entire community pretty optimistic. But before we get there, shouldn’t we ask how digital the existing banks are? If the criteria for that is based on the number of memoranda of understanding signed or the random awards won, then the industry certainly has some serious competition. Don’t take my word for it, just check your LinkedIn feed, where suited-booted uncles pose for their (un)characteristic pictures and boilerplate press releases. But in case the goal is to truly assess their performance, we need to have a more meaningful proxy. While digital readiness incorporates a number of factors, perhaps the single most useful indicator is the transaction mix since payments are effectively all that Pakistani banks do anyway. Unfortunately, our financial institutions don’t really believe in disclosing such information and face no pressure from the shareholders or regulator to do so either.