SBP initiates plans for the establishment of regulatory sandboxes
and innovation offices
In a strategic move to foster digital banking and
technological solutions within the banking and financial sector, the State Bank
of Pakistan (SBP) has outlined a plan to establish cutting-edge facilities,
including technical and regulatory sandboxes, and innovation offices in major
cities over the next five years.
Revealed in its 5-year strategic plan, the banking
regulatory body aims to embrace the latest technological trends in the banking
and financial sector. The objective is to promote the digitization of banking
services, offer guidance to existing and new market players, and explore the
utilization of innovative technologies such as Distributed Ledger Technology
(DLT), Artificial Intelligence, and Machine Learning in digital financial
services.
SBP
unveils ambitious five-year blueprint for sharia-compliant banking system
The establishment of these entities is geared toward
digitalizing the economy, stimulating economic activity, and fostering growth
in the country, as outlined in the strategic plans.
With the rapid evolution of new technological advancements,
including artificial intelligence, blockchain technology, cloud storage,
fintech, and big data, central banks worldwide are adapting to new roles and
responsibilities. These changes necessitate a structured transformation of
organizational infrastructure and systems to strengthen their roles as
regulators.
Under its Vision 2020 strategy, SBP laid the groundwork for
developing a financial ecosystem that supports digital financial services. The
introduction of RAAST addressed multiple payment gaps, and now, SBP aims to
further enhance the digital financial services landscape.
Dubai
Islamic Bank Pakistan introduces enhanced digital onboarding solutions
To achieve this, SBP plans to strengthen the governance
framework, encourage technological advancements, particularly in remittances
and payments, promote the digitization of government payments and receipts,
reduce currency in circulation through digitization, and improve the oversight framework
of payment systems. Additionally, the central bank aims to create awareness to
mitigate risks in the use of digital financial services.
SBP's strategic plans also include upgrading the oversight
framework for payment institutions to enhance financial and systemic stability,
consumer protection, and digital adoption. It will implement state-of-the-art
regulatory and supervisory technologies and establish frameworks to proactively
monitor, detect, and respond to cybersecurity threats to protect the critical
digital infrastructure of the financial sector.
Collaborating with federal, provincial, and local
governments, SBP intends to digitize their payments and receipts. Active
measures will be taken to replace the use of currency with digital means, and
the legal, regulatory, and governance frameworks will be enhanced to promote
the wider adoption of digital financial services, strengthening collaborative
mechanisms between stakeholders.
Source: Pro Pakistani