Page 21 - CMA Journal (July-August 2025)

Exclusive Interview

ICMA: You have worked closely with banks, regulators,
and fintech companies. What needs to improve to help
digital payments grow faster in Pakistan? To accelerate the growth of

Fawad A. Kader: To accelerate the growth of digital digital payments in Pakistan, we
payments in Pakistan, we need a shift in mindset, policy, need a shift in mindset, policy,
and infrastructure—across both public and private
sectors. and infrastructure—across both

First, there must be stronger collaboration and public and private sectors
sandbox-style experimentation between regulators,
banks, and fintechs. We need to move away from
compliance-first thinking to a more balanced approach
that allows for controlled innovation. Regulatory costs, hurdles, and trust barriers. Incentives must flip this
dynamic in favor of digital payments. The public sector
sandboxes can enable startups and incumbents to test
new solutions in real-world conditions without fear of can lead by example by digitizing all its disbursements
and collections, from salary payments and subsidies to
regulatory penalties—this is critical for validating new
business models and driving innovation that fits our utility and tax payments. Only with aligned incentives,
consistent policy, and true public-private partnership
unique market.
can we achieve mass-scale adoption of digital payments
Second, open banking and API-first ecosystems must in Pakistan.
become a national priority. While some progress has
been made, we still lack consistent technical standards ICMA: How do you see data and analytics helping
financial services become more secure, efficient, and
and regulatory clarity that would allow data and services
to move freely and securely between financial customer-focused?
institutions. This limits interoperability, which in turn
Fawad A. Kader: Data and analytics are foundational to
restricts user adoption and innovation.
the future of financial services. When used strategically
and ethically, they can unlock a new level of security,
Third, traditional players must evolve their approach to
partnerships. Many banks and large institutions still see efficiency, and customer centricity.
fintechs as threats rather than enablers. For digital
At the core, data allows institutions to shift from reactive
payments to scale, we need banks to be more open,
to predictive operations. Instead of waiting for
agile, and partnership-oriented. That means shared
customers to request services or flag issues, banks can
infrastructure, faster onboarding, and co-creating
use behavioral data, transaction histories, and contextual
products that are market-fit.
insights to anticipate needs and offer tailored
Fourth, we need patient capital and long-term thinking. solutions—from pre-approved credit to financial
planning nudges. This not only improves customer
Most digital payment models in emerging markets take
years to become profitable. Without investors and experience but also builds loyalty through relevance and
timeliness.
ecosystem players willing to support the industry
through this maturity cycle, innovation will continue to
From a security perspective, advanced analytics and
stall at proof-of-concept stages.
AI-powered models enable real-time fraud detection and
Fifth, government policy must remain stable and risk mitigation. By recognizing patterns and anomalies in
customer behavior, institutions can proactively flag
forward-looking. Frequent shifts in leadership, lack of
clarity around tax policy, or changing directives for suspicious activities, reduce false positives, and prevent
losses—without degrading the user experience.
financial institutions create uncertainty. The momentum
from SBP’s progressive stance must continue with
Data also plays a transformative role in credit scoring and
alignment from ministries, FBR, and provincial bodies.
financial inclusion. In markets like Pakistan, where formal
Finally—and perhaps most critically—we need a credit histories are scarce, alternative data—like utility
payments, telco usage, or business transactions—can
paradigm shift where cash becomes more expensive to
use than digital. Right now, cash remains frictionless and help build more inclusive credit models. This expands
access to finance for underserved segments, especially
cheap as the cost of cash is never passed down directly
to the people, while digital transactions often involve MSMEs and gig economy workers.

ICMA’s Chartered Management Accountant, Jul-Aug 2025 19