Page 57 - CMA Journal (July-August 2025)

Focus Section

Evidence from the Financial Industry of Pakistan fintech innovations. As per Gomber et al. (2018), financial
institutions are required to create holistic protective
Being a developing economy, Pakistan regards strategies targeted at handling process interruptions
technology as an essential driver of development (Rizvi, from fintech. Magrane and Malthus (2010) also
2018). Considering a large youth population, increasing highlighted the role of audit committees in internal
smartphone and internet penetration, rising preference control, external financial reporting, risk management,
for e-commerce among consumers, acceptance of digital and both internal and external auditing.
transactions, and an accommodative financial sector
ready to embrace innovation in technology, the country References:
seems to have all that is required for the growth of the
• Rizvi, S., Kurtz, A., Pfeffer, J., & Rizvi, M. (2018, August). Securing the
fintech scenario. Nonetheless, financial technology is Internet of Things (IoT): A security taxonomy for IoT. In 2018 17th IEEE
facing challenges in achieving adoption at a noticeable International Conference on Trust, Security and Privacy in Computing
scale due to the perceived risks and uncertainties and Communications / 12th IEEE International Conference on Big Data
accompanying new-age digital solutions. Science and Engineering (TrustCom/BigDataSE) (pp. 163–168). IEEE.
• Magrane, J., & Malthus, S. (2010). Audit committee effectiveness: A
However, general fears such as security breaches and public sector case study. Managerial Auditing Journal, 25(5),
regulatory loopholes have been the main reason why 427–443.
multiple startups face difficulty in executing fintech
• Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the
ideas. The lack of a complete set of regulations for fintech revolution: Interpreting the forces of innovation, disruption,
cross-border usage or oversight adds further complexity and transformation in financial services. Journal of Management
to the digital finance ecosystem (Treleaven et al., 2015). Information Systems, 35(1), 220–265.
Some of the risks faced by fintech proliferation in • Ryu, H. S. (2018). What makes users willing or hesitant to use fintech?:
Pakistan include cybersecurity threats, intellectual The moderating effect of user type. Industrial Management & Data
property issues, challenges in customer acquisition and Systems, 118(3), 541–569.
retention, as well as regulatory ambiguity. While fintech • Treleaven, P. (2015). Financial regulation of FinTech. Journal of
has revolutionized the world of finance globally, very few Financial Perspectives, 3(3).
potential users fully trust that it is safe.
• Qambrani, S. A. (2024). Exploring the adoption of fintech and its
difficulties in Pakistan's emerging economy concerning financial
Adopting Fintech: Perceived Risks inclusion. Indonesian Journal of Innovation and Applied Sciences
(IJIAS), 4(2), 180–187.
Insecurity in fintech adoption is associated with four
main segments of perceived risk, as highlighted by Ryu • Awotunde, J. B., Adeniyi, E. A., Ogundokun, R. O., & Ayo, F. E. (2021).
Application of big data with fintech in financial services. In Fintech
(2018b): with artificial intelligence, big data, and blockchain (pp. 107–132).
Singapore: Springer Singapore.
• Financial Risk: Financial loss, additional fees, or
higher transaction costs. • Kandregula, N. (2019). Leveraging artificial intelligence for real-time
fraud detection in financial transactions: A fintech perspective. World
• Legal Risk: Uncertainty related to regulations Journal of Advanced Research and Reviews, 3(3), 115–127.
guiding the use of fintech. • Qaiser, H., & Fahad, M. (n.d.). Department of Accounting and Finance,
National University of Modern Languages, Pakistan. Fintech has been
• Security Risk: Privacy, data protection, and security a global phenomenon and trend lately.
system vulnerabilities.
About the Author: The writer is a Fellow member of ICMA and is
To tackle these barriers, it is necessary to implement risk
currently working as Manager, Audit and Taxation at Maan
mitigation and proactive strategies. Auditors can help Associates, Cost and Management Accountants, Faisalabad. She
ensure that human oversight plays an effective role in also serves as a Faculty Member at ICMA Faisalabad Campus.
designing and detecting operational disruptions of

ICMA’s Chartered Management Accountant, Jul-Aug 2025 55