Experts call for stronger data governance in banking sector

Experts are advocating for stronger data governance within Pakistan's banking sector as the country's digital payments ecosystem rapidly expands and its economic ties with South Asia and the Gulf grow stronger. The influx of workers' remittances reached USD 41.6 billion in FY26, while the State Bank of Pakistan (SBP) reported 9.1 billion retail payments worth PKR 612 trillion in CY25.

With digital channels managing 88% of these transactions, including 6.2 billion processed via mobile apps, there is a continuous stream of operational data that reveals customer behavior, identity, and cross-border payments. To enhance governance, risk management, compliance, and financial inclusion, experts are emphasizing the importance of "Private AI" as the next critical step.

Private AI can turn vast volumes of operational data into accountable, defensible decisions, providing clear audit trails for regulators, boards, and customers. This technological shift is essential for advancing financial inclusion, as it consolidates fragmented data, linking issues like fraud management, sanctions screening, and trade finance into a unified, easily auditable evidence trail.

The regulatory framework for this transition is already being established, with the SBP's National Financial Inclusion Strategy 2024-28 promoting digital empowerment and responsible finance, alongside its internal audit guidelines encouraging advanced technological tools. However, integrating AI requires strict operational discipline to ensure banks retain control over data residency, role-based access, and audit logging, maintaining compliance while preserving necessary human oversight for material decisions.

Brief written by urgent.news from Business Recorder's own syndicated text. Machine-written — may contain errors; check the original before relying on it.