Digital transformation a must for financial sector

State Bank of Pakistan (SBP) Deputy Governor Saleemullah has stressed that digital transformation is no longer optional but it is imperative for financial institutions and called for making investment in advanced analytics, artificial intelligence and automation alongside development of regulatory frameworks that balance innovation with stability.

He was speaking at the 16th SaarcFinance seminar titled “Challenges and Opportunities in the Capacity Building of Central Banks and the Financial Industry: Lessons for Saarc Countries,” organised by the SBP at the National Institute of Banking and Finance (Nibaf), Islamabad on Monday. The event brought together experts, policymakers and delegates from member countries of the South Asian Association for Regional Cooperation (Saarc) to discuss the critical issues shaping the future of central banking and financial systems.

In his address, Saleemullah emphasised the transformative impact of technological advancements, geo-economic shifts and climate change on central banking. He also highlighted the growing role of AI, machine learning and blockchain in enhancing the efficiency, inclusivity and affordability of financial services.

The deputy governor outlined three key challenges facing central banks and financial institutions. Firstly, the accelerating adoption of AI, Big Data analytics and blockchain necessitates urgent reskilling of central bank workforce to keep pace with innovation. Secondly, the global digital divide poses significant risks to the adoption of digital technologies in developing regions like South Asia. And thirdly, the rise of fintech and financial interconnectedness, which has intensified challenges related to cybersecurity, data privacy and financial fraud, demands greater regional and global collaboration.

He also spoke about the unique role of SaarcFinance as a platform for cross-border collaboration, advocating for joint training programmes, knowledge exchange and the establishment of regional centres of excellence.

At the conclusion, Nibaf CEO Riaz Nazarali Chunara called for taking collective action, stating that by embracing innovation, investing in human capital and strengthening regional cooperation, Saarc countries could build a more resilient and inclusive financial ecosystem.