Karachi: State Bank of Pakistan (SBP)’s Governor Jameel Ahmad has urged financial institutions to prioritise human oversight over AI in sensitive areas such as loan approvals and customer due diligence.
“Human supervision remains essential to monitor AI-driven decisions, especially in critical functions like credit approvals and customer due diligence,” Ahmad said at the sixth AlBaraka Forum Regional Conference – Pakistan 2026, titled Islamic Economy in the Digital Age: Innovation Within the Framework of Compliance, on Monday.
At the same time, the SBP governor acknowledged the role of AI and other technological advancements in driving growth across the banking sector. He highlighted that, thanks to SBP’s policy interventions, expansion of digital financial services, and strong consumer adoption of online platforms, “the national payment ecosystem has witnessed significant progress in recent years.”
Mobile banking apps, including branchless banking, wallets, and electronic money institutions (EMIs), now account for 78% of total digital retail transactions, Ahmad noted. He added that over 70% of people globally use at least one digital financial service, with more than 80% willing to adopt digital banking, signaling a major shift in consumer behaviour and expectations.
Focusing on Shariah-compliant banking, Ahmad said Islamic finance has entered the digital era with unique characteristics. “Islamic finance should closely connect financial activities with the real economy, ensuring fairness, transparency, and shared prosperity,” he said. “It is not merely conventional banking with different parameters but a deliberate effort to build an inclusive ecosystem that serves diverse segments of society rather than a select few.”
He stressed that adopting digital innovation is a means to achieve broader socioeconomic goals. “Technology in Islamic finance and the wider financial sector can expand financial inclusion, lower costs, remove geographic barriers, and provide access to finance for small businesses, farmers, and women entrepreneurs, groups historically underserved by the formal financial system,” Ahmad said.
The SBP granted principal approval to five digital banks in 2022. Currently, one digital bank has begun Shariah-compliant operations, while another is in the pilot phase, marking a new chapter for Islamic digital finance in Pakistan. Initiatives like Raast, Assan Mobile Account, digital onboarding frameworks, Roshan Digital Account, and the licensing of digital banks have collectively expanded access to formal financial services for the masses.
However, Ahmad warned that technology could merely replicate conventional financial models in digital form, prioritising speed and scale over substance and compliance with Shariah principles. To mitigate this, he urged financial institutions to go beyond basic regulatory compliance, establish strong data protection frameworks, and maintain the highest standards of governance.
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