Experts call for stronger data governance in banking sector

Karachi, Pakistan – Experts are advocating for stronger data governance measures in Pakistan’s banking sector as the country’s digital payments system grows at a rapid pace. Workers sending money home to their families contributed USD 41.6 billion to Pakistan’s economy in the fiscal year 2026 (FY26), and the State Bank of Pakistan (SBP) reported that 9.1 billion retail payments worth PKR 612 trillion were made in the calendar year 2025 (CY25).

An overwhelming 88 percent of these transactions are now processed through digital channels, with 6.2 billion payments made through mobile apps alone.

This massive volume of data generated by digital transactions underscores the need for robust institutional governance, risk management, and compliance (GRC). Experts are calling for the implementation of "Private AI" as the next crucial step in addressing issues related to governance, security, and financial inclusion. According to Muhammad Ghazali Aqeeq, a leading Governance, Risk, and Compliance (GRC) expert, deploying bank-controlled AI can help transform the massive amounts of operational data into decisions that are accountable, defensible, and easily auditable for regulators, boards, and customers.

The deployment of Private AI in the banking sector would consolidate fragmented data and create a unified evidence trail for key functions such as fraud management, sanctions screening, and trade finance. This technological shift is vital for enhancing financial inclusion, as it can proactively identify emerging patterns in consumer complaints and fraud, leading to swift resolution and clear accountability.

Pakistan's SBP's 2024 Financial Inclusion Index scores the nation at 58.1, reflecting the country's extensive banking infrastructure. The nation boasts over 19,800 bank branches and 756,480 branchless banking agents, expanding access to financial services nationwide. However, this expansion also introduces complex data-quality, consent, and service risks, which Private AI can help manage effectively.

The regulatory framework for this transition is already in place, with the SBP's National Financial Inclusion Strategy 2024-28 focusing on digital empowerment and responsible finance. The bank's internal audit guidelines also encourage the use of advanced technological tools. However, Aqeeq warns that integrating AI into banking operations requires strict operational discipline.

By ensuring banks retain control over data residency, role-based access, and audit logging, Private AI can maintain compliance while preserving the necessary human oversight for critical decisions.