A Study on the Sustainability and the Scalability of Digital Banks in Pakistan

Abstract

The following is an independent study conducted by Mohsin Ashfaque Khan (an MBA student of NUST Business School) on the digital banking landscape of Pakistan. The State Bank of Pakistan (SBP) provided digital banking licenses to five entities in Pakistan to set up operations of a virtual bank and to provide all banking services through digital means. The following are the five entities who received the digital banking license: 1. HugoBank Limited, 2. KT Bank Pakistan Limited, 3. Mashreq Bank Pakistan Limited, 4. Raqami Islamic Digital Bank, 5. Telenor Microfinance Bank/easypaisa Digital Bank. This document aims to shed light on what exactly digital banks are and what their scope of services is. Additionally, all five digital banks, including their sponsors, will be scanned in detail. Furthermore, challenges in the sustainability and scalability of the operations of these digital banks will be analyzed in the context of Pakistan’s current digital landscape, the sponsors of these digital banks, and Pakistan’s cultural and societal fabric. Lastly, keeping all the discussion and arguments in the background, it will be concluded whether these digital banks will be a success or a learning curve for Pakistan’s digital revolution. This document is intended to be viewed and used by the defense committee of NUST Business School. It is stressed that the information inside this document, especially the stage at which each digital bank is, the different products they aim to provide, and information pertaining to each bank’s technology stack and structural changes, be kept strictly confidential.