Pakistan’s banking system is changing at an unprecedented pace, as millions of people are now trying to enter the formal financial network and shift towards digital banking. The traditional branch-based banking model is no longer capable of handling such a massive influx of new users.

With tens of millions of previously unbanked Pakistanis seeking digital access to payments, remittances, and savings, industry experts warn that the old system simply cannot keep up. Providing modern, fast, and reliable financial services to such a large population has become nearly impossible under the conventional banking structure.

Banks are now being pushed to switch from branch-based banking to digital-first banking. Seeing this fast-changing demand, Mashreq has launched Mashreq NEO, Pakistan’s first Islamic-first and fully digital banking platform. As a UAE-based bank, its goal is to provide modern, seamless, and high-quality services — and to completely redefine how people access financial solutions.

While 65% of Pakistan’s population is registered with a bank account, only 28% of these accounts remain active. Why is this the case? Because millions of accounts become dormant due to outdated and inefficient systems. Traditional banking requires customers to go through complicated procedures, fill lengthy forms, and stand in long queues for hours. Rural users still rely heavily on cash, while freelancers and small entrepreneurs face constant challenges with international payments and high fee deductions.

This growing divide between what people need and what the system provides has only widened with time.

Mashreq NEO aims to bridge this gap by offering a fast, paperless, and accessible digital banking experience.

It is designed to help people:

• Open accounts without paperwork
• Make secure digital payments
• Save money easily
• Send and receive money quickly

The entire system is cloud-based, meaning it’s fast, reliable, and built for large-scale digital use. They aim to reach 10 million customers in five years.

A major focus of Mashreq NEO is the remittance market, which forms the backbone of Pakistan’s economy. Pakistanis send home $9.3 billion from Saudi Arabia and $7.8 billion from the UAE every year — a combined total that highlights how essential efficient remittance channels are for millions of families.

Mashreq Bank Pakistan CEO Muhammad Hamayun Sajjad says the digital platform has been specifically designed to address Pakistan’s deep-rooted structural banking problems. By making remittances faster, simpler, and cheaper, Mashreq NEO aims to remove the long-standing barriers that have held the country’s financial system back. “We have 9.1 billion digital transactions annually worth around Rs612 trillion. But the architecture behind the system is outdated, built around branches, paperwork, and core systems designed decades ago," he said. "We see this as an opportunity. A digital bank, if done right, can disrupt the market, reduce costs for customers, and expand inclusion at scale." 

The bank compares its plan to Nubank in Brazil, which helped 22 million people open their first bank account, reduced banking fees significantly and boosted the economy.

Mashreq believes Pakistan can see a similar transformation. "One bank in Brazil helped 22 million people open their first-ever bank account. It reduced banking fees from 3.3% to 1.1%. Imagine the impact if Pakistan adopts a similar model," he said. "Digital architecture, if ethical and transparent, can contribute billions back to the economy."

 Credit: Independent News Pakistan (INP)