Come to think of it, banks in pakistan are pretty good in making ads. Aren’t they? Ads made by commercial banks over decades have touched the emotions of people, while selling them saving accounts and insurance services. The quality of production is impressive and the jingles are becoming catchy. Mukammal Account by UBL, Dil Main Account Khonlay K Tareeqay” by Allied Bank and “The Way Forward” campaign by Bank Alfalah are some of the many inspirational and motivational TV commercials that probably have more of a feel-good value than actual product offering.

While these ads have been pivotal in creating awareness of the banking services in rather extremely under and unbanked country and banks deserve this credit but times are changing fast. Customers are becoming more aware of their needs and are expecting much more from their banks than fancy communication. A simple current account or a basic saving account do not meet the needs of today’s customer. Free SMS alerts and cheque books are something essential, but there is no ‘extra’ or incremental value here that banks need to realize.

Why banks are lagging behind?

With increasing penetration of internet, rapid rise of technology startups, customers are getting tech savvy and much more demanding. Unfortunately commercial  banks in Pakistan are not catching up with the advancement which is evident in rest of the world.

There have been some good initiatives like Omni by UBL, MCB Lite Wallet (though the product is shelved unfortunately) but on a greater scale, either there is lack of innovation in banks or the pace is too slow. Mostly, it’s the repackaging and re-branding of decades old services. Internet banking is limited and provides very basic experience.

So, who is leading the pack?

The space left by the established, known banks is  being taken over by the Fintechs like Finja, FonePay and branchless banking players like JazzCash, Easypaisa and others. These players, in spite of being relatively new entrants in market are pushing the boundaries quite fast. If one thinks of 10 innovations that have been introduced in market in last 2 years, mostly they are from the branchless banking players.

Easy and faster account opening process, wide network of cash deposits and withdrawal outlets and introduction of digital channels by branchless banking players have revolutionized the financial services industry in many ways.

What challenges are faced by bank

A detailed article can be written on challenges faced by banking industry in Pakistan but I’ll list the ones that are important for customers.

  • Access to most of the services is still based on traditional methods. Like visiting branches and filling in long forms, attaching supporting documents etc, whereas customers want digital channels with availability of all services at one place
  • Customer service is still not at par with international banks
  • Limited network of ATM
  • Turnaround time for services is painfully long.

Can Banks bounce back or is it too late?

The game is not over yet but there is no room for complacency anymore. Banks need to realize the fast changing Fintech landscape and ride on the wave. But, it’s not just the technology, it’s the mindset and how things are done traditionally that needs to be changed. Banks have impressive number of  human and monetary resources at their disposal that if utilised properly can become their strength. The old working models need to be replaced with digital channels and quick processes to tap into every evolving customer base. If not taken seriously, Fintechs will tap this market sooner than later.

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