- Ashburn, United States
- Mar, 24th, 23
The new framework announced by the State Bank of Pakistan (SBP) will help the financial institutions in the country to improve their services and outsource their material and non-material workload easily, WealthPK reports. The framework will enable Pakistani financial institutions to enter a new era of technology. The SBP recently published the Framework on Outsourcing to Cloud Service Providers (CSPs), allowing its regulated entities to migrate to the cloud. The framework sets out minimum requirements for banks to outsource their material and non-material workloads to CSPs.
Imran Khan, co-founder of the RapidCompute, told WealthPK that Pakistan’s local cloud provider, the domestic CSPs, had long been talking to the SBP about allowing banks and financial institutions to host their critical systems on local clouds. The financial sector, especially the banks, has traditionally been the biggest spenders on IT products and services. The financial sector spent more than Rs6.1 billion on hardware in 2021.
He said that microfinance banks and the upcoming digital banks would now be able to outsource all their material and non-material workload to local CSPs. “If they wish, they can also move their non-core data to international cloud platforms,” he added. Imran Khan said that instead of building their own on-premise servers, banks could turn to reputable local CSPs for improving their services and meeting their urgent requirements without going through lengthy and expensive procurement cycles.
He said that Pakistani banks face issues of scale, which cause service inconsistencies and bad customer experiences. This could be greatly mitigated by mass-level cloud adoption, which would allow for greater flexibility. Their digital assets, such as mobile or internet banking, can benefit from the additional scale available to handle increased customer queries and transactions.
As a result, the cost of running an efficient infrastructure will also come down. On-premises hardware is usually bought at certain points in time and often ordered in excess capacity since the IT departments want to make the procurement futureproof, especially to avoid the hassle again. The dollar rate also makes the cost almost non-competitive against the CSP offering, which mimics business needs and growth more closely. In a nutshell, new products and services can be tested and introduced within a short time.
Electronic Money Institutions (EMIs) such as digital wallets like Nayapay and payment service providers such as Safepay, who are inherently more digital, have been granted more flexibility. They can use international CSPs for even their core services to promote their business.
“This means that the time to market for digital financial products and services can be cut short. By accessing the wealth of cutting-edge services on international clouds, especially around artificial intelligence and machine learning, more customer-centric solutions can be created to further accelerate financial inclusion and promote financial activities,” said Imran Khan. He told WealthPK that keeping in view the need for reducing imports, the policy is very timely and could greatly reduce the dependency of banks on imported hardware for their services.
Credit: Independent News Pakistan-WealthPk