Challenges and Opportunities faced by the Banking Sector in Pakistan in the wake of Covid-19 Pandemic

Abstract

The economic impact of the COVID-19 crisis is very different from other past financial crises or business-cycle downturns. The purpose of this project is to develop an understanding particularly in the management field, through exploring implementation of distinct banking strategies to cope with an evolving crisis. The research conducted for the purpose of this project was through a combination of narrative and objective literature review and primary interviews of senior level management from top Banks of Pakistan using a semi structural guide. The findings of this project strive to develop the importance of the role Banks play in the overall economy of the nation and how the strong regulatory environment and the overall socio-economic setting of Pakistan’s financial markets have allowed the Banks to be one of the most stable sectors of this economy. Rather than being part of the problem in the previous global financial crisis, Banks had a much greater role in the solution to safeguard the economy and the livelihood of the population in Pakistan’s perspective through course of Covid-19 pandemic. The initial responses of the Banks were primarily enforceability of the healthcare SOPs laid out by the government and regulated by SBP. A big part of it was also the business continuity for uninterrupted delivery of banking services digitally where technology played the most significant role. This also came as a blessing in disguise as the pace of digital transformation really picked up pace which might have caught up several years later otherwise. The second part of the findings highlight the interventions by the regulator and government of Pakistan in safeguarding the economy and keeping the financial sector robust. The interventions were implemented through commercial Banks of Pakistan and played the most crucial role in keeping the financial sector completely immune to the adverse impact of Covid and aided towards kickstarting the economy and achieve unexpected GDP growth when the other countries in the region contracted significantly. Lastly, the findings also establish the future expectation in the sector and the role technology will be playing. It finds out how the consumer patterns have shifted on digital medium through the course of pandemic and how post covid banks can capitalize on this to adopt complete digital transformation suggesting the ways that can be done. Through this, Banks can reap the benefits of first movers in this space going forward emphasizing on the role of big data analytics. The world during covid has changed significantly and by the time it is completely over, the world will be different place with no place for complacency especially for the banking sector.