KARACHI: State Bank of Pakistan (SBP) Deputy Governor Jameel Ahmad has emphasised the need for a review of the prevailing banking business models to meet the challenges of rapidly changing financial and technological landscape, a press release said on Wednesday.

Mr Ahmad said it while addressing scholars, industry practitioners and professionals on the topic of “Changing Dynamics: Bank of the Future” as a keynote speaker at the 29th Annual Convention of Association of Professional Bankers, Sri Lanka.

He said that innovations, such as cloud computing, blockchain technology, artificial intelligence, machine learning and big data analytics, are set to transform the financial industry in diverse areas from intelligent customer relationship management systems to proactive risk management, fraud detection and prevention.

However, he cautioned the financial industry about the aggravated threats relating to cyber security. He emphasised the need for adopting a proactive and cooperative approach to address the risk of rising cyber attacks. He said the financial industry, especially banks and their regulators, should acknowledge that traditional restructuring will not help in these changing times and that banks must reinvent their business models based on cost efficiency, technical innovation and customer orientation.

Mr Ahmad said that amidst growing use of the internet and social media as well as the availability of low-cost mobile and other smart devices, bank customers are demanding enhanced and customised services. If banks fail to address them, they may face extensive competition from non-banks and fin-techs that are rapidly making inroads into the domain of financial intermediation.

He said that banks, including central banks, must work towards creating a strong and enabling legal and regulatory environment that is commensurate with the new and emerging realities of the future. Banks should build capacity and the skill sets of their staff to adequately respond to these challenges, he added.

Published in Dawn, November 23rd, 2017