GVS: Why is digital banking essential for Pakistan?
Noman Azhar: Offering the ability to access, use and move money via mobile devices, digital banking apps lets you as a user make financial decisions and transactions on the go. There’s no need to sit in front of a computer to make online payments or come into a branch. Digital banking is the answer to many problems that we face today as a customer as well as state. While digital banking ensures easy access of financial needs to customers it also helps in digitizing the economy which ultimately is beneficial for the state.
GVS: What makes a digital bank different to traditional bank? Can anyone offer these services?
Noman Azhar: So, the first and foremost difference is the fact that traditional banks work on a brick & mortar model whereby they are dependent on a branch infrastructure to offer services to their customers. On the other hand, in digital or neobanks, the journey starts with the offering of full-scope innovative digital banking services at the doorstep to the customers and without a need of visiting any physical location. Many players are offering partial digital banking services in the market under either branchless banking license or EMI license. What sets Zindigi apart is that it aspires to be the first full-service digital bank of Pakistan. Advancing to a more technologically sophisticated way of doing things, it goes without saying that the benefits make life easier for the customer.
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GVS: Why is SBP issuing digital licenses- what will these specifically allow banks/other institutions to do which they cannot do otherwise?
Noman Azhar: So, the purpose of License is to allow new players and existing players to build a new entity which works as only a digital bank in Pakistan without having any dependency on either a commercial or microfinance bank to run its operations which is mainly the case currently. Also without having a digital banking license most of the players can only offer a smaller/limited value accounts to their customers along with limited set of services. With digital banking license, their will be no limitation on the type of account or services that a bank can offer including lending, corporate, treasury services etc. However, it will surely depend upon the type of license you apply and receive. At minimum, a digital bank will be allowed to provide all kind of services of deposit mobilization and transactional banking without any limitations to its customers.
GVS: Where are the key growth areas in digital banking?
Noman Azhar: The sky is the limit when it comes to digital banking. The banking industry is undergoing massive digital disruption, with online deposits, mobile apps, and e-bill payments fundamentally becoming the norm. In Pakistan, there are many areas where digital banks can grow quickly. We are a population of 220 Mn people and only around 12 Mn account holders with full banking access. For me though personally, savings & lending remains the key growth for Digital Banks in Pakistan.
GVS: What are the big issues in digital banking that Pakistani banks are facing?
Noman Azhar: I will say our challenges are common to any industry and organization which are trying to embrace change. Technology intervention is not only a change at operational level for processes it requires a major change in the mindset of resources which is not a very easy task to achieve. Change management at its best is required to transform Human Resource of a decade or more old organization from a purely paper-based risk averse model into a pro tech aggressively changing organization.
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GVS: How are you marketing yourself to this millennial group?
Noman Azhar: We have two separate brands, and they work completely independent of each other while they support each other in sharing the strengths. One is our traditional bank brand i.e., JS Bank which is a full commercial bank working with almost 300 branches and servicing more than a million, high net worth customers while the other one is Zindigi i.e., our newly launched digital banking experience focusing on Gen Z & Millennials of the country.
On JS Bank side, we are digitizing the internal processes and procedure to not only increase the efficiency internally but to also give a WOW experience to our customers who are interacting with our bank. From a completely revamped simple and clean new mobile banking app to Internet Banking & WhatsApp bot, we have enabled hundreds of use cases on these channels for customer convenience and we are adding more on a regular basis.
For Zindigi we launched first of its kind customizable mobile app with an ethos of giving full control of the digital bank to our valued customers as to how they want to see the look and feel of their app, where they want to place icons and more. In addition to this Zindigi customers can select a color of their choice and apply it as a theme in the app.
We understand that our target customers like independence and they want to control and operate things their way hence we ensure to provide them the requisite tools to do that. Our target customers are extremely knowledgeable, are hands on with not only their tech stuff and are keen to explore their financial independence in the simplest and easiest way. These Gen Z & millennials are into savings and investment like no other generation and the level of interest and understanding they have about this area is unprecedented. Hence to tap this need and meet market demands, Zindigi became the first ever banking experience to offer live stock trading and investment in mutual funds.
GVS: Earlier this year you launched the Zindigi App – how is that experience going?
Noman Azhar: As explained in my previous question, Zindigi is targeted towards future and we want to make the life of customer very simple that’s why our slogan is “Simple Karo”. We are the only Digital banking experience of Pakistan offering both a full fledge account to be opened digitally and a master debit card which can be used both internationally and locally. This has taken the industry by a storm and we are receiving overwhelming response from customers on this Alhumdiulillah.