The future of e-banking linked to the digital inclusion of the masses
KARACHI: Ghazanfar Azzam, CEO of Mobilink Microfinance Bank Limited (MMBL), says the future of the digital banking model is bright, but it is linked to more and more people using e-services comfortably.
Azzam expressed these views in an exclusive interview with The News.
Here are the highlights of this enlightening speech.
Q: Has MMBL seen a change in customer behavior after the COVID-19 outbreak?
A: The digital bank has been operational in Pakistan for some time. However, the current pandemic has played a central role in the evolution of the mentalities of our banking customers towards the digital switchover. The results of one of the first surveys on the digital banking experience in Pakistan – Banking in the Digital Age: Exploring Pakistan’s Potential, conducted by AF Ferguson & Co. (a member of the PwC network), reaffirm the growing inclination from customers to convenience and personalized banking made possible through digitalization. The survey points out that 82 percent of all consumers visit their physical bank branches once every few months or only visit them once to open their accounts. Instead, 67% and 55% of people prefer to use mobile and internet banking services, respectively, to meet their banking needs.
The first wave of the COVID-19 virus, along with the total lockdown that followed, crippled lives and made Pakistani consumers aware of the importance of mobile wallets and online banking. It has also enabled us to leverage our resources as a digital bank and to expand our area of online services. Our JazzCash mobile wallet grew 52% year-over-year in terms of overall transactions with 1.1 billion transactions worth over $ 12 billion processed in 2020. The app grew by 180 % YoY and over 110,000 Payoneer accounts were linked to this. In addition, more than 2,300 direct and indirect jobs were created by JazzCash last year.
Q: Do you think the digital banking model will hold up in the future, considering that only 21% of adult Pakistanis have a formal bank account?
A: Although Pakistan is primarily a cash economy, attitudes are changing and it is undeniable that the future is digital. Pakistan’s mobile and internet penetration is growing exponentially – over 83% of our population uses cell phones and half of them (42% +) use a 3G / 4G connection. This shows a strong inclination of our masses towards digital services. In addition, the government and other respective authorities are aware of this trend and have continually presented plans and ideas to facilitate the digital switchover, such as Raast, PayPak and Roshan Digital Account, to name a few. . So, yes, I see the digital banking model continuing into the future. However, it is imperative to provide adequate orientation and training to the masses to put them at ease in the use of electronic services such as digital banking. Private actors in the banking sector, along with the SBP, should collaborate to improve digital accessibility for the masses.
Q: Can you share the innovative solutions your bank has introduced or is working on?
A: More than anything, 2020 has shown how the banking industry can respond to difficult situations with agility and innovative thinking. In the future, these qualities will become increasingly important as we seek to deliver ever more personalized and inclusive digital experiences to our customers. MMBL recognizes this need and continually moves towards the complete digitalization of its operations. Using biometric enabled handheld devices, MMBL integrates customers and delivers asset and liability products without the need for a single sheet of paper through the use of secure digital signatures.
Q: Does MMBL have specific products geared towards women? Also, in line with SBP’s recent draft policy, what are some of the steps your bank is taking to improve the engagement of women in its branches and improve the financial literacy of the masses in general?
A: Almost half of the population of our country is made up of women and they lag far behind men in terms of financial inclusion and contribution to economic activity. We must respond to this untapped pool of our potential target market to achieve sustainable national progress. One of our major priorities at MMBL is therefore to create equality in banking practices and to reduce the gender divide in financial inclusion. Currently, 157,494 out of 826,843 of our borrowers are women. In addition, MMBL has a gross loan portfolio (GLP) of over Rs 25 billion, of which over 20 percent is loaned to women micro and small entrepreneurs. We aim to dramatically increase this number by adding more inclusive products to our portfolio. One example is our Bint-e-Hawa product which is a women-centric depository offering exclusively for women, ranging from housewives to salaried professionals and entrepreneurs. The account comes with a free checkbook, free personalized ATM debit card, very attractive profit rates and many other benefits.
We are also actively partnering with like-minded organizations to digitize payments and raise awareness of fintech solutions for women. As part of SBP’s National Youth Financial Literacy Program, MMBL has achieved its goals in a commendable manner and recorded over 51 percent female participation in several capacity building and awareness sessions for the masses.
We also have representatives in most of our branches to facilitate the financial inclusion of all women. More than 150 female staff are now employed at MMBL, with more than 80 people in our branches, to meet the needs of clients and meet women in rural areas to educate them on the importance of using financial services.