State Bank of Pakistan (SBP) Governor Jameel Ahmad has emphasized that human judgment must remain central to banking decision-making, particularly in sensitive areas such as loan approvals and customer due diligence, as artificial intelligence continues to gain ground across the financial sector. His remarks came at the 6th AlBaraka Forum Regional Conference – Pakistan 2026, held under the theme “Islamic Economy in the Digital Age – Innovation Within the Framework of Compliance.”
Addressing participants, the SBP governor acknowledged that banks are increasingly deploying artificial intelligence to improve operational efficiency, enhance risk management frameworks, and reduce costs. However, he cautioned that overreliance on automated systems without adequate human oversight could pose significant risks. According to Ahmad, AI-driven decisions must be continuously monitored, particularly where credit assessment, compliance, and customer verification are concerned, as these areas have direct implications for financial stability and consumer trust.
He noted that Pakistan’s national payment ecosystem has undergone rapid transformation in recent years, largely due to policy interventions by the central bank and strong consumer adoption of digital platforms. Initiatives such as Raast, Asaan Mobile Account, Roshan Digital Account, and the licensing of digital banks have played a pivotal role in expanding access to formal financial services. As a result, digital channels now account for approximately 78 percent of total digital retail transactions in the country, reflecting a significant shift in consumer behavior.
Placing these developments in a global context, Ahmad pointed out that more than 70 percent of people worldwide use at least one digital financial service, while over 80 percent are willing to transition to digital banking. This trend, he said, underscores changing expectations among customers who increasingly value convenience, speed, and accessibility in financial services. However, he stressed that technological progress should be accompanied by strong governance and accountability mechanisms.
Turning to Islamic finance, the SBP governor highlighted that the sector is entering the digital age with a distinct responsibility. He emphasized that innovation in Islamic banking must remain aligned with Shariah principles, including fairness, transparency, and a strong linkage with the real economy. Ahmad warned that there is a risk technology could simply replicate conventional financial models in digital form, prioritizing scale and speed over substance and ethical alignment.
He reiterated that digital innovation should be viewed as a means to achieve broader socioeconomic objectives rather than an end in itself. According to Ahmad, technology has the potential to significantly expand financial inclusion by lowering costs, reducing geographic barriers, and enabling access to finance for underserved segments such as small businesses, farmers, and women entrepreneurs. These groups, he noted, have traditionally remained outside the formal financial system and stand to benefit the most from well-designed digital solutions.
The SBP governor also highlighted the central bank’s efforts to foster a supportive regulatory environment for digital and Islamic finance. He said initiatives including digital onboarding frameworks and the licensing of digital banks are laying the foundation for a more inclusive and resilient financial system. At the same time, he stressed the importance of robust data protection frameworks and adherence to high regulatory standards to mitigate risks associated with rapid technological adoption.
Concluding his address, Ahmad underscored that the challenge facing the financial sector is not whether it can adopt advanced technologies, but how these technologies are governed. He said sustainable digital finance, particularly within Islamic banking, requires active collaboration among regulators, financial institutions, scholars, and industry leaders to ensure innovation remains aligned with long-term economic stability and public interest.
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