Page 49 - CMA Journal (July-August 2025)

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F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F
Focus Section
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Cybersecurity Risk Governance in Pakistan’s
Fintech Sector: A Critical Assessment
Pakistan’s Data-Driven Fintech Boom has experienced greater
disruption in its finan-
Pakistan has a variety of intermediaries categorized
cial sector than ever
within a financial system, which includes both bank and
before—impelled by
non-bank intermediaries. The former comprises
the high rate of penetra-
commercial, Islamic, specialized, and microfinance banks,
tion of digital financial
while the latter encompasses development finance
technologies.
institutions, non-bank financial companies, and
insurance firms. In this environment, the banking sector Credit scoring through
is the most dominant in terms of asset size and systemic artificial intelligence,
impact, accounting for almost 77% of the aggregate biometric onboarding,
resources contributed by the financial sector and instant microloans,
approximately 50% of GDP. QR-based merchant
payments, and access- Dr. Azeema Usman
The management of such an ecosystem is primarily the
ing remittances through Assistant Manager
responsibility of two apex authorities, namely the State
apps have changed the (Research and Publications)
Bank of Pakistan (SBP) and the Securities and Exchange
parameters of access to Saviours, Karachi
Commission of Pakistan (SECP). The central bank is
finance. These platforms,
required to preserve financial stability under the SBP Act
including JazzCash, Easypaisa, SadaPay, Finja, and
of 1956, which it exercises through the regulation of a
QisstPay, among others, now empower millions of
wide variety of institutions and infrastructures, including
Pakistanis to transact, borrow, or save with as little as a
microfinance banks (MFBs), development finance
smartphone and a CNIC, effectively bypassing the frictions
institutions (DFIs), exchange companies, payment
of traditional banking.
service providers, and electronic money institutions
(EMIs), among others. However, a deep-seated vulnerability is created due to
the same innovations that are used to democratize
As it aligns with global regulatory standards, the SBP has
finance. Every time we swipe, tap, or scan our face, it
focused not merely on establishing resilience to systemic
represents a gesture. The data translated into sensitive
shocks but has also aimed to modernize financial
personal and monetary information is likely to be stored
intermediation through technology-enabled reforms,
and processed by private operators working in the grey
seeking to make it more inclusive and growth-inspiring. ¹
areas of regulation.
However, in the latter half of the past decade, the country
Table 1: Growth, Share, and Size of Pakistan’s Financial Sector
Percentage Share in Total Assets as a Percentage of
YoYY Growth in Assets (%)
s
Institutions Assets (%) GDPP (%)
2
2022 2023 2024 2 2022 20233 2024 2022 20023 2024
.
MFBs 29.4 2.4 38.5 1.6 1.3 1.5 1.0 00.8 1.0
5
DFIs 165.7 63.3 -15.5 1.9 4.0 2.8 1.9 44.2 2.8
.
NBFIs 26.7 34.5 80.0 5.5 5.8 8.9 3.6 33.4 5.8
.
Insurance 20.2 31.4 — 2.2 2.5 2.0* 1.2 1.3 1.2*
e
2
CDNS -12.7 -6.2 1.5 7.3 5.4 4.6 4.5 33.3 3.0
Banks 19.1 29.5 15.8 7 77.0 78.55 77.2 47.8 488.4 50.0
.
.
Overall Sector 18.6 27.0 17.8 100 100 100 32.0 61.7 64.8
e
* Note: Insurance data is available up to September 2024.
Sources: SBP, SECP, CDNS, PBS
ICMA’s Chartered Management Accountant, Jul-Aug 2025 47