Impact of Digitalization after COVID-19 on Banking Sectors in Pakistan.

Abstract

The purpose of this study is to examine the effects of digitalization on the banking industry in Pakistan after the COVID-19 outbreak concerning the shifting trend towards the use of digital banking facilities, alteration in consumer behaviour, and concerns that the banking organisations have encountered during the process of digital transformation. Thus, the study conducted a survey collecting quantitative data to measure the degree of digitalization affecting banking practices in Pakistan. Major observations arising from the study shall show that the pandemic accelerated a shift in the mode of banking with a rise in the number of online, and mobile banking, and customers’ preference for contactless services. However, the study also reveals some limitations like the cybersecurity factor, the absence of digital structures in rural regions, and vintage populations’ reluctance to change. First, the study reveals that banks need to increase spending on digital channels, improve cybersecurity, and provide an efficient platform for customers. The authors encourage policymakers to work on the creation of new regulations that would reflect the current tendencies in the development of digital technologies and innovation in the sphere of banking. The study also advocates the need to educate customers to protect them from risks such as fraud. This research adds knowledge to the existing literature on the digitization taking place in the banking industry of Pakistan and offers practical solutions to the identified issues that stakeholders should consider to adapt to the rapid change and sustain the industry’s growth into the future.