Prospects, Issues, and Policy Implications for Islamic Fintech Development in Pakistan

Abstract

Financial technology has the potential to impact positively the financial sector whether it is conventional finance or Islamic finance. It is a dire need of the day to develop Fintech (Financial technology) in Pakistan. There are, however, certain issues present in Pakistan in this regard. The core purpose of this study is to explore these issues in depth and provide a solution for those. The second objective is to highlight the prospects of Fintech for the Islamic finance sector in Pakistan. This is qualitative research following an exploratory method. Top experts belonging to different categories of stakeholders for a standard Fintech model have been interviewed. Data analysis has shown that this includes a lack of IT and Telecom infrastructure, a lack of long-term policies by the Government, tight regulatory rules by the SECP, and low flexibility for the Islamic financial institutions when it comes to the regulatory framework by the SBP. Customers' attitudes and lack of awareness campaigns are the other issues. Another important issue is the non-availability of required human resources for Fintech development. The good news is that all these issues can be overcome. The prospects of Fintech for Pakistan are very promising.