required. ladies and gentlemen ; keeping in view the discussed challenges and opportunities, banks need to devise certain strategies that can help them grow and stay on course. i must say that banks are essentially required to acknowledge that times have changed and in order to stay competitive they must embrace technology and forge new partnerships to re - invent their business models. i will go to the extent of saying that the upcoming age may become the age of less or even non - intermediation where role of intermediary institutions like banks and their regulators could become limited if they don ’ t embrace these changes pragmatically. page 12 of 15 now i will present few suggestions which can help to proactively address the challenges of the future : • first, with regards to the global financial regulatory reforms, we need to be proactive and consider adopting them at an early stage. however, any implementation needs to be proportional to the complexity of the financial institutions and the system. while implementing the standards and regulations relating to aml and cft we must be pragmatic in our approach so that growth of banking industry or their customers is not hampered. • second, authorities are now increasingly focusing on improving the situation of financial inclusion in their respective jurisdictions. banks and other players of the financial industry need to come forward and help in this regard. without compromising on the basic regulatory requirements, technology - enabled, risk based approach for assessing client risk and customer on - boarding may be adopted. • third, central banks and other regulatory authorities must work towards creating a strong, robust and ubiquitous payments system with focus on developing an enabling legal and regulatory environment that is commensurate with the new technological environment. some of the areas to be covered may include, but should not remain limited to cloud computing, data privacy and protection, cybercrime and formalizing the role of non - banks including critical service providers in the area of technology services. • fourth, it is important that we place special focus on formalizing the role of non - banks which include fintechs, payment service providers and especially critical service providers like technology and telecom page 13 of 15 providers because the dependence of financial entities on these players is becoming critical and their failure may threaten the overall financial stability. regulators must especially be wary of issues relating to consumer protection, data privacy and money laundering arising due to new and complex partnerships and data sharing arrangements between banks, fintechs and it service providers. • fifth, banks and the financial industry are facing threats from

, consumer finance, agriculture, islamic banking. page 10 of 15 i am also happy to share with you that pakistan has one of the most sophisticated national identity systems which is run by a government entity called national database & registration authority or nadra. nadra has gained international recognition for its success in providing biometricenabled identity solutions to all the citizens of pakistan. the government of pakistan undertook a massive initiative to biometrically verify all sims issued in pakistan and around 130 million sims were re - verified using nadra ’ s database. state bank of pakistan also capitalized this opportunity by requiring banks to use the nadra database for digital onboarding of customers, especially the unbanked population, and mitigating the risks relating to money laundering and terrorist financing. this is a great example of how technology can be used for not only customer facilitation but for compliance purposes also. due to rapid technological progress, the global financial and payment landscape is transforming very rapidly. sbp has long recognized the importance of technology and has been facilitating banks and financial industry to reap the benefits of digitization. to keep pace with technological transformation and mitigate the associated risks, sbp has issued various guidelines encompassing frameworks for enterprise technology governance and risk management, payment systems ’ designation, security of internet banking, prevention against cyber - attack, risk management in outsourcing arrangements by financial institutions, etc. i am pleased to share that last year sbp facilitated the issuance of our domestic payment scheme called the paypak. the encouraging aspect of paypak is that it has been issued by a private entity that is owned by 11 page 11 of 15 private banks thus ensuring full blessing and participation of the private sector in this payment scheme. moreover, sbp is developing a national payment system strategy to modernize the clearing and settlement infrastructure for reducing cost, improving efficiency, enhancing security, and strengthening its regulatory and supervisory oversight. sbp is also playing a very important role of facilitator and catalyst and our doors are open to innovation and innovative ideas. sbp is also facilitating the entrance of non - banks particularly in payments arena and has issued rules for payment system operators and service providers. we have seen encouraging response to these regulations and now a variety of nonbank, digitally enabled businesses have entered or are preparing to enter the pakistani market with innovative and customer centric products. sbp also engages with the fintechs in the country on regular basis to understand their business models and facilitate them if