Pakistan’s financial ecosystem is undergoing a significant digital transformation, with a growing shift from traditional banking to more accessible, customer-centric digital services. At the heart of this revolution lies digital banking, where financial services are provided through the internet or mobile platforms—whether it’s transferring money to a mobile wallet instead of handing over cash, or paying utility bills through an app rather than dealing with physical currency. Digital banking promises not just convenience, but also transparency, security, and cost-effectiveness. The true value, however, lies in its ability to reshape the customer journey, making financial services seamless and accessible for all.
Despite the enabling role of Payment System Operators (PSOs) and Payment Service Providers (PSPs), traditional commercial banks in Pakistan have been slow to adopt the digital-first approach. However, initiatives like Raast and Roshan Digital Accounts (RDA) are changing the landscape, driving financial inclusion and shaping the future of banking in Pakistan. As the country heads into 2026, these initiatives, along with the broader efforts of the State Bank of Pakistan (SBP), are poised to create a more integrated and inclusive financial ecosystem.
The Current Landscape: Commercial Banks and the Shift to Digital
Many of Pakistan’s traditional commercial banks operate more like asset management companies, focusing on the arbitrage between cheap funds and risk-free investments in government securities such as Treasury Bills and Pakistan Investment Bonds. While this model has been profitable, it leaves little room for high-risk activities such as consumer lending or micro-lending. This gap is where digital-first platforms are stepping in, offering accessible solutions to underserved populations.
Despite the digital shift, physical branches are unlikely to disappear entirely. For commercial banks, branches remain a critical source of cheap deposits, and many banks are likely to continue expanding their physical footprints in the near future. However, digital offerings will become increasingly important, and commercial banks will need to adapt to this new reality to remain competitive.
Raast and Roshan Digital Accounts: Driving the Digital Revolution
Launched in 2021, Raast is Pakistan’s first instant digital payment system, designed to streamline payments between individuals, businesses, and government entities. Part of the broader Digital Pakistan Vision, Raast enables efficient, cashless transactions, with the ultimate aim of reducing reliance on physical currency and integrating underbanked segments of society into the formal economy. By 2024, Raast had already processed over 50 million transactions worth PKR 3 trillion ($15 billion), and projections indicate that by 2026, it will handle 100 million transactions, valued at PKR 6 trillion ($30 billion). Alongside Raast, Roshan Digital Accounts (RDA) were launched in 2020 to cater to the financial needs of Non-Resident Pakistanis (NRPs). The platform allows NRPs to manage their finances, send remittances, and invest in Pakistan’s financial markets without the need to visit physical bank branches. Since its launch, Roshan has already facilitated over $5 billion in remittances, and 600,000 accounts have been opened. By 2026, Roshan is expected to surpass 750,000 accounts, generating over $7 billion annually in remittances. The platform’s expansion into digital insurance and pension products will further cement its role as a one-stop solution for NRPs.
The State Bank of Pakistan’s Digital Financial Services Policy.
A key driver of Pakistan’s digital banking shift has been the State Bank of Pakistan’s Digital Financial Services Policy of 2017. The policy’s goal was to create a regulatory framework that would foster the growth of digital financial services, promote financial inclusion, and encourage the adoption of fintech innovations. It outlined several objectives, including:
- Financial Inclusion: The policy aimed to increase the proportion of banked adults in Pakistan, targeting a growth in access to financial services from 21% in 2014 to 50% by 2020. This ambitious goal remains a work in progress, but platforms like Raast and Roshan are central to closing the gap by bringing unbanked and underserved populations into the formal financial system.
- Low-Cost Digital Financial Services: The policy prioritized the development of affordable and efficient digital financial services to ensure that all segments of society, especially low-income individuals and SMEs, could access banking services at minimal cost.
- Encouraging Financial Innovation: By establishing clear regulatory guidelines, the policy has encouraged the growth of fintech companies, fostering innovation in digital payments, lending, insurance, and other financial services.
- Secure Digital Transactions: The policy emphasized the importance of building a secure digital financial infrastructure that ensures trust and reliability among consumers and businesses.
The success of digital platforms like Roshan and Raast can be directly attributed to the regulatory clarity and support provided by this policy. By creating a framework that encouraged the adoption of digital banking, the SBP laid the foundation for a more inclusive, innovative, and efficient financial system.
Digital Banks: The Role of Innovation and Collaboration
The SBP’s 2021 Exposure Draft of the Digital Bank Regulatory Framework took this vision further, outlining plans for two types of digital banks:
- Digital Retail Banks (DRB): These banks would cater to retail customers, including individuals, SMEs, and agricultural entities. DRBs would operate exclusively through digital channels, removing the need for physical branches.
- Digital Full Banks (DFB): These would serve both retail and corporate customers, providing a complete range of banking services through digital channels.
The introduction of these digital bank categories signifies the SBP’s commitment to promoting financial inclusion and technological innovation. By creating a regulatory environment that supports digital-first institutions, the SBP aims to modernize Pakistan’s financial services and make them more accessible to all citizens, especially the underserved.
The Road to a Cashless, Paperless Society
For Pakistan’s digital banking revolution to succeed, three key conditions must be met. First, service providers must focus on the customer, tailoring solutions to meet their specific needs, preferences, and behaviors. Financial services should not only be functional but should offer an experience that is convenient, secure, and cost-effective. Second, collaboration between commercial banks and fintech companies is essential. By combining the technical expertise of fintechs with the financial strength of traditional banks, this partnership can unlock innovative solutions. Open banking frameworks and Application Programming Interfaces (APIs) will be vital to enabling this collaboration and creating seamless customer experiences.
Finally, the government must continue to create a conducive regulatory environment thatpromotes Government-to-Person (G2P) and Person-to-Government (P2G) payments as a norm. By doing so, it can increase the adoption of digital financial services and make them more accessible to a larger portion of the population.
While the journey to a fully cashless and paperless society may seem distant, the initiatives set in motion by the SBP and platforms like Raast and Roshan signal that Pakistan is on the right path. The groundwork laid today will shape the future of Pakistan’s financial ecosystem and drive the country toward becoming a leader in digital finance.
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