Digital banking in Pakistan: a new era takes shape

Back in January 2023, the State Bank of Pakistan (SBP) quietly set in motion a change that’s now beginning to reshape the financial system. It granted No Objection Certificates (NoCs) to a handful of players keen to launch digital banks. These weren’t full licenses, but they signaled intent: Pakistan was ready to experiment with digital-first banking.

Fast forward two years, and the experiment is becoming reality. In January 2025, Mashreq Pakistan launched pilot operations as the first digital retail bank under a restricted license. A small step, but a telling one.

Why digital banking matters here

Pakistan has a population of 230 million, but according to the World Bank, almost 100 million adults remain unbanked. In rural areas, where nearly two-thirds of the population lives, brick-and-mortar branches aren’t a realistic solution.

This is where digital banking changes the story. Mobile penetration is already high, even in remote areas. A farmer in Punjab or a shopkeeper in Gilgit can now open an account, transfer funds, or take out micro-insurance with nothing more than a smartphone. The branch is in your pocket.

The effect could be dramatic: financial inclusion at scale, driven not by more concrete buildings but by better technology.

Shari’ah compliance: a decisive factor

There’s another layer unique to Pakistan. By 2027, the SBP has mandated that all banks must be fully Shari’ah-compliant. For digital banks, that’s not a limitation, it’s an opening.

Demand for Islamic finance is already strong. Products like profit-sharing deposit accounts or Shari’ah-compliant investment tools are sought after. Digital platforms can deliver these with more flexibility than legacy banks weighed down by old systems.

And here, Azentio has a role to play. Our iMAL platform is the world’s only AAOIFI-certified Islamic core banking software, trusted across the industry. For digital banks in Pakistan, that certification means confidence, the ability to innovate while staying true to Islamic principles.

Technology that goes beyond access

Digital banking is about more than just convenience. With AI, machine learning, and even blockchain, services can become more personalized and inclusive.

• AI can evaluate creditworthiness for people with no traditional credit history.
• Blockchain can make cross-border remittances faster and more transparent.
• Real-time data lets banks design micro-products that meet very specific customer needs.

From micro-loans to savings apps for students to working-capital tools for small businesses, the opportunity set is broad.

Trust and literacy matter too

For all the promise, there are hurdles. Security, fraud prevention, data privacy, none can be ignored. The SBP has already signaled that digital banks will face strict compliance checks. That’s necessary to build trust.

And beyond regulation, there’s consumer education. A digital wallet is only useful if customers understand how to use it safely. Financial literacy campaigns will be as critical as the technology itself.

The road ahead

The first NoCs in 2023 were the starting gun. By 2025, pilot launches are underway. Over the next five years, Pakistan’s digital banking sector will likely expand rapidly, shaped by inclusion, Shari’ah compliance, and innovation.

At Azentio, we see this not as an abstract trend but as a real opportunity to bring millions into the formal economy. With platforms built for Islamic finance and digital delivery, we’re helping financial institutions leap forward, faster and more securely.

The road ahead is digital, inclusive, and uniquely Pakistani. And it’s already unfolding.