Page 42 - CMA Journal (July-August 2025)

Focus Section

Challenges & Barriers to Scaling FinTech Inclusion initiatives would make Pakistan's FinTech ecosystem
more innovative, transparent, and inclusive.
Despite rapid progress, Pakistan's FinTech-driven
inclusion faces several significant obstacles. Conclusion & Recommendations
Smartphone usage is rising, but digital literacy gaps Digital payments and data analytics have driven
persist, especially in rural areas. Mobile app navigation, Pakistan's FinTech revolution, which has promoted
PIN security, and transaction request authentication are financial inclusion. Over the last three years, Easypaisa,
common issues for customers. It underutilises present JazzCash, and Raast have integrated millions into the
services and limits modern options like digital credit and economic system and enabled disadvantaged groups to
insurance. The Pakistan Telecommunication Authority access loans, savings, and insurance using intelligent
found that 38% of rural mobile internet users had never analytics. The sector's biggest challenge is balancing
used a mobile banking app in 2023. Digital payments innovation and customer safety, despite promising
have increased cyber threats, including phishing and growth. The SBP should create comprehensive FinTech
SIM-swap fraud. Mobile financial fraud increased 27% in legislation on data security, AI decision-making
2023, according to the Pakistan Computer Emergency transparency, and interoperability.
Response Team. FinTechs and banks have improved
multi-factor authentication and anomaly detection An EU-style data-sharing system might allow banks and
systems, but cyber risk still threatens client confidence. FinTechs to securely share customer data with consent,
boosting innovation and protecting consumer rights. The
Non-bank PSPs and EMIs are crucial to reaching SECP may create regulatory sandboxes for
underrepresented communities. Regulatory ambiguity in blockchain-based payment systems, AI-enhanced credit
data protection, e-KYC, and cross-border payments has scoring, and CBDC experiments. This regulated
slowed product rollout. Entrepreneurs developing environment would allow FinTech developers to examine
innovative solutions face uncertainty as the SBP's 2019 novel ideas under supervision, reducing market
EMI guidelines emerge. It might discourage investment disruption risk and speeding product development.
and delay market entry for newcomers.
FinTech organisations must educate rural and
Despite 4G penetration, rural areas still have inconsistent inexperienced clients. Vernacular language training, fraud
internet and unequal electricity. Even the most intuitive awareness, and user-friendly interfaces are examples. In a
FinTech solutions fail without solid infrastructure. Many cash-dominated world, physical touchpoints are critical for
new users are wary about digital banking, fearing fraud onboarding and building trust; therefore, agent networks
or financial loss. Consumer protection laws and public must expand into underbanked areas. The
awareness campaigns must address this trust gap. The telecommunications sector, energy companies, and
SBP's financial literacy efforts are addressing this issue, legislators must work together to fix infrastructure issues
but nationwide expansion is difficult. like rural internet access. Collaboration can overcome
technological barriers to FinTech adoption.
Future Outlook
Rising technology, regulatory reforms, and collaborative The Path Forward
activities will influence the forthcoming phase of
Pakistan's FinTech advancement. Numerous revolutionary Pakistan should incorporate AI and blockchain, organise
developments are expected to reshape the digital the CBDC, and build strong public-private partnerships
financial services sector in the upcoming five years. for rural outreach. Its financial system may also improve.
Expanding inclusion will boost the formal sector, tax
Modern machine learning models look for anomalous
transaction patterns, but next-generation AI will use compliance, and economic resilience. FinTech in
behavioural biometrics like typing and gadget usage to Pakistan has a bright future if innovation, inclusion, and
detect fraud in real time. Chatbots that give tailored regulation coexist.
financial advice in local languages will improve customer References
service. However, blockchain technology creates a secure, • State Bank of Pakistan. (2024). Payment systems review 2023–24.
transparent transaction database, boosting counterparty Retrieved from https://www.sbp.org.pk
confidence. Blockchain technology might reduce • World Bank. (2024). Global Findex database – Pakistan snapshot.
settlement times from days to seconds and save money in Retrieved from https://globalfindex.worldbank.org
Pakistan's USD 30 billion yearly cross-border remittances • GSMA. (2024). Mobile money metrics – Pakistan. Retrieved from
(World Bank, 2024). Smart contracts can automate https://www.gsma.com/mobilemoneymetrics
conditional payments, such as supplier invoices issued • World Bank. (2024). Migration and remittances data. Retrieved from
upon delivery confirmation, in domestic transactions. https://www.worldbank.org/en/topic/migrationremittances
Environmental, Social, and Governance (ESG) factors in About the Author: The writer holds a Ph.D. in Management
FinTech credit scoring and investment platforms are also Sciences (Finance), an M.Phil. in Finance, and a Master's degree in
expanding. FinTech-enabled green loans might finance Political Science. He is a Research Assistant at COMSATS University
Islamabad and a Faculty member at SZABIST University. Published
solar panels for rural households or low-emission in several Scopus-indexed international journals, his expertise spans
equipment for small businesses when climate-related corporate finance, financial accounting, financial economics, CSR,
dangers affect Pakistan's economy. The combination of SDGs, and reverse technology spillover, blending academic
AI, blockchain, CBDCs, and PPP-driven financial literacy knowledge with practical insights for policy and decision-making.

40 ICMA’s Chartered Management Accountant, Jul-Aug 2025