Across global financial systems, fintech has evolved from a layer of digitization into foundational infrastructure, shaping how value is exchanged, governed, and safeguarded. In Pakistan, digital payments, mobile wallets, and branchless banking have expanded rapidly, but the deeper transformation of financial infrastructure now depends on something less visible: the technical and regulatory readiness required to move innovation into the mainstream.
This tension between aspiration and execution was evident in the discussion From Sandboxes to Mainstream: Policy, Regulation & Digital Assets, moderated by Shajee Hanfi, Head of Legal, Raqami Bank. While digital assets and emerging financial technologies are often framed as policy questions, the conversation revealed that their successful adoption is inseparable from integration capability, protocol maturity, and institutional alignment.
Watch the session video here:
A recurring theme was that experimentation has outpaced standardization. Shahzad Shahid of TPS highlighted that Pakistan’s payments and switching infrastructure has grown significantly more sophisticated, operating at volumes and criticality that demand predictability. Yet when new asset classes or digital instruments attempt to plug into this infrastructure, they encounter friction not because of resistance, but because of uneven technical readiness across the ecosystem. Systems designed for regulated, mission-critical workloads cannot absorb inconsistent implementations, undocumented integrations, or protocol mismatches without introducing risk.
This mirrors challenges already visible in open banking initiatives. Integration is rarely slowed by unwillingness; it is slowed by uneven maturity. Banks may have onboarding processes, APIs, and security frameworks in place, but progress stalls when partners struggle with documentation discipline, routing logic, encryption standards, or enterprise-grade testing practices. As one insight echoed during the forum, integration is only as efficient as the least prepared participant.
Nabeel Qadeer of LUMS CeDAR approached the issue from a policy and research perspective, noting that sandboxes have been valuable precisely because they expose these gaps in controlled environments. However, he cautioned that prolonged reliance on pilot frameworks risks institutionalizing fragmentation. Without clear standards emerging from sandbox learnings, experimentation remains disconnected from production systems. Evidence from other markets shows that sandboxes are most effective when they lead to defined interoperability rules, certification thresholds, and shared technical baselines.
Protocol literacy emerged as a quiet but decisive factor. Pakistan’s financial ecosystem operates across ISO messaging standards, proprietary protocols, legacy routing frameworks, and modern APIs. When fintechs or new digital asset platforms interact with this environment, a lack of understanding around message structures, routing logic, security expectations, or failover models leads to failed tests, unstable connections, and prolonged integration cycles. These are not abstract technical issues; they directly affect trust, scalability, and regulatory confidence.
Infrastructure misalignment compounds the problem. Asfandyar Farrukh of CAP & HUB pointed out that from an investor’s perspective, scale depends on predictability. Lightweight technology stacks may enable rapid prototyping, but they struggle when interfacing with banking infrastructure that requires stability, redundancy, and audit-ready controls. Without alignment between innovation layers and core systems, promising ventures remain stuck at proof-of-concept, unable to attract long-term capital or institutional partnerships.
The regulatory perspective brought by Zeeshan Khattak, Commissioner at SECP, reinforced why sequencing matters. Encouraging innovation without governance exposes the system to risk, while over-regulation too early can suppress experimentation. The challenge, he noted, lies in translating sandbox insights into enforceable frameworks that define licensing, custody, disclosure, interoperability, and oversight. Regulation, in this sense, becomes an enabler of scale rather than a constraint on innovation.
What connects digital assets, open banking, and broader fintech adoption is the same missing link: the absence of unified standards and baseline technical expectations. Without regulatory direction mandating open interfaces, standardized protocols, and certification environments, each institution defines its own requirements. This forces partners to rebuild integrations repeatedly, increases costs, and fragments the ecosystem. Banks hesitate to expand access, fintechs face unpredictable timelines, and consumers see slower innovation.
The discussion underscored that mainstream adoption cannot occur in an environment where sandboxes function as permanent substitutes for policy. Sandboxes are transitional tools, not endpoints. Without clear outcomes, organizations hesitate to invest deeply, integrations remain bespoke, and innovation stays peripheral rather than systemic.
The path forward is increasingly clear. Moving from experimentation to execution requires regulatory clarity around digital assets and open interfaces, standardized technical frameworks, improved protocol literacy across fintechs, disciplined documentation practices, and formal certification layers before production access. These are not theoretical ideals; they are practical prerequisites observed in markets where fintech has become infrastructure rather than exception.
The insights from this session reflected an ecosystem beginning to confront these realities. The conversation was less about whether Pakistan should adopt digital assets or advanced fintech models, and more about whether the system is prepared to integrate them responsibly. Bridging this gap will determine whether innovation strengthens the financial system or remains confined to pilots and isolated deployments.
Pakistan’s fintech future will be shaped not by the speed of experimentation, but by the strength of its foundations. As digital assets, open banking, and new financial models move closer to the core, success will depend on integration maturity, protocol alignment, and regulatory frameworks that convert ambition into durable infrastructure.
Fintech Forward Forum 2025 took place on September 23 in Karachi, hosted by ITCN Asia and programmed by PakBanker.
The future of finance in Pakistan is being written, and this is where the story continues.
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