Experts call for stronger data governance in banking sector

KARACHI: Experts have called for stronger data governance in Pakistan’s banking sector amid the rapid expansion of the country’s digital payments ecosystem and its growing economic linkages with South Asia and the Gulf.

Inflows of workers’ remittances hit USD 41.6 billion in FY26, while the State Bank of Pakistan (SBP) reported 9.1 billion retail payments worth PKR 612 trillion in CY25. With digital channels handling 88 percent of these transactions including 6.2 billion processed via mobile apps, this immense scale generates a continuous stream of operational evidence regarding customer behavior, identity, and cross-border payments.

As Pakistan’s banking sector experiences unprecedented digital growth, experts point to “Private AI” as the critical next step for institutional governance, risk management, compliance and financial inclusion. “Private AI” could play a key role in strengthening governance, security and financial inclusion, they said.

According to a leading Governance, Risk, and Compliance (GRC) expert, Muhammad Ghazali Aqeeq, deploying bank-controlled AI allows institutions to turn massive volumes of operational data into accountable, defensible decisions providing clear audit trails for regulators, boards, and customers alike.

He said that private AI environment consolidates this fragmented data, linking issues like fraud management, sanctions screening, and trade finance into a unified, easily auditable evidence trail as this technological shift is equally crucial for advancing financial inclusion.

The SBP’s 2024 Financial Inclusion Index scored the nation at 58.1, reflecting a massive domestic network of over 19,800 bank branches and 756,480 branchless banking agents.

While this infrastructure expands national access, it simultaneously introduces complex data-quality, consent, and service risks, Aqeeq said and added that Private AI supports inclusive banking by proactively identifying emerging patterns in consumer complaints and fraud, ensuring swift resolution and clear accountability.

The regulatory foundation for this transition is already taking shape. The SBP’s National Financial Inclusion Strategy 2024-28 champions digital empowerment and responsible finance, while its internal audit guidelines encourage advanced technological tools.

However, he said that integrating AI requires strict operational discipline. Private AI ensures banks retain full control over data residency, role-based access, and audit logging, keeping institutions compliant with legal obligations while preserving necessary human oversight for material decisions, he concluded.

Copyright Business Recorder, 2026