, the state of financial system is marked by low deposit to gdp ratio, account ownership, and bank assets. the credit to private sector in the country is also low compared to peer economies, as is the coverage of credit bureaus'optimal use, 1 / 3 bis - central bankers'speeches which can potentially transform the country's financial system landscape. similarly, the country's debt and equity markets are also not deep and diversified. all these aspects of our financial system may come to define the scope of the finance lab, and challenges it may attempt to address. globally, in the recent years, financial system has evolved at a brisk pace with the increased use of technology and digital transformation of processes and payment methods. today, funds can be transferred in just few clicks within and across the borders, accounts can be opened sitting at home and payment for services can be made 24 / 7 without going anywhere. the world is keeping its pace and advancing toward central bank digital currencies, internationally integrated faster payment channels, growing fintechs, open banking, and cloud technology. these trends are radically reshaping every sector of the economy and have also become important drivers of growth in many countries. among these trends, financial institutions are now also exploring artificial intelligence and data analytics, which includes machine learning enabled credit scoring models and credit decisions ; artificial intelligence enabled solutions to anti money laundering and know your customers ; and technology usage to analyze and get insights from piles of available data and take more informed decisions. developments in big data analytics is helping financial institutions to dig deeper and get insights about customers'behavior, needs and wants. similarly, artificial intelligence is facilitating quick decision - making using computer algorithms and big data in ways that were unimaginable a few years ago. investing in technology offer immense potential. i am pleased to inform that the sbp has taken a number of steps to embrace technological innovation. in the interest of time, i will briefly highlight three such initiatives. first, sbp has developed a licensing and regulatory framework for setting up digital banks in pakistan. a digital bank is defined as a completely digital entity that will provide all types of banking services and operations, from accounts opening to taking deposits and lending funds, through digital means without the need for customers to physically visit any bank branch. the framework mainly aims to enhance financial inclusion through efficient and cost - effective digital financial services. second, sbp is working towards open banking regime to facilitate the implementation of its agenda on financial inclusion and digitization.

, though, been associated with a reduction in the fraction of income that is saved. this rose sharply in the aftermath of the collapse of lehman brothers as households responded to the increased uncertainty about income and job prospects by building up extra savings, or reducing their debts, as a precaution. as that uncertainty dissipated and households began to feel more confident about the outlook, so the saving rate fell back ( chart 1 ). there is probably some scope for it to fall a little further, but continued firm consumption growth really depends on us seeing a pickup in household income growth, of which i will say more shortly. there is more scope for housing investment to continue driving growth. housing starts and the level of housing transactions are still respectively around 25 % and 10 % below their averages during the pre - crisis decade ( chart 2 ). but the supply of new housing is not as elastic as one would like, because of planning restrictions and the like. consequently there is a risk that increased demand for housing ends up mainly in higher house prices rather than more houses. in turn, if associated with excessive expansion in mortgage lending, that may create future financial stability risks. for that reason, the bank ’ s financial policy committee, which is charged with maintaining the overall stability of the financial system, is keeping a beady eye on the housing market. bis central bankers ’ speeches for the recovery to be both sustained and sustainable, however, we really want to see three things happen. first, business investment needs to pick up the baton in supporting demand growth. second, we need to see a revival in productivity growth, which in turn would sustain both higher real wages and higher profits, thus supporting continued household and business spending growth. finally, though perhaps over a longer time frame, an expansion in net exports is desirable, in order to rebalance the composition of demand and reduce the uk current account deficit. let me say a little about each of these in turn. business investment fell by almost a third in the recession, reflecting the generalised collapse in demand, heightened uncertainty and restricted availability of credit. although those headwinds have eased considerably, business investment in 2013 was still only just over 1 % above its 2010 level. now it is not too surprising that business investment has been slow to pick up. that is typically the case in business cycle recoveries, as businesses will want to use up spare capacity and to be confident that improved business conditions will persist before they undertake capital expenditures that may be costly to reverse. and the