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The State of Artificial Intelligence (AI) Report ranked Pakistan 117 out of 172 countries in terms of AI readiness at a global scale.

In response, the Ministry of Information Technology and Telecommunication released the first draft of Pakistan’s ‘National Artificial Intelligence Policy’ in early 2023. The draft included an ambitious set of National IT targets with a timeline for each grand scale activity.

The scope and applicability of AI and machine learning in business operations is growing at an unprecedented rate. The technology associated with it can recognise unique patterns in a standardised dataset, analyse it and replicate key findings in various business environments.

In Pakistan there are a limited number of institutions which maintain an updated and internally consistent database, hindering the country’s ability to adopt digital solutions.

As a result, policymakers have drafted an AI policy with primal focus on academia and its role in educating the masses on the scope of artificial intelligence.

The financial sector, a global leader in adopting AI solutions, has been sidelined in the policy despite high data readiness levels of its institutions.

This causes concern over the governments ability to lead AI-powered initiatives and its governance in the country.

Financial institutions in Pakistan have already shown interest in adopting AI solutions for their customer facing products.

The banking sector, an integral part of the financial services industry, looks to follow global trends in digital innovation to remain competitive through improved client experiences.

The scope of AI in the banking sector alone includes use of a) WhatsApp integrated chatbots, b) effective risk management strategies and c) tailored term finance facilities based on future market trends developed by predictive AI models.

In 2020, an Islamic bank adopted this model and provided automated customer facilities leveraging the power of AI-enabled technology.

To determine the current usage of AI in the country, the federal government organised a sectorial survey with key stakeholders: 1) government sector, 2) academia, 3) financial services, 4) IT industry, 5) retail & commerce, 6) manufacturing industry, 7) healthcare and 8) agriculture industry.

Financial Institutions, despite their interest in adopting AI solutions, had the least number of representatives in the stakeholder survey. The most represented category of stakeholders belonged to academia.

The National AI policy draft supports adoption of the Triple Helix Partnership concept. It builds on the notion that academic institutions must be owners of the research and development efforts in the country and play a key role in bringing artificial intelligence at the forefront of local business operations.

It advises seamless transfer of knowledge from universities, to the government, and lastly, to the industry.

Pakistan has a history of following the traditional top-down approach in policy design. Any layman would argue that the National AI policy draft is progressive and deviates from the traditional approach as it introduces the government as an intermediary between the two key stakeholders.

However, the policy fails to recognise the endless capabilities of artificial intelligence and its sub-domains in the context of real-world problems. Each industry has its own unique requirements, industry experts in their respective domains possess the expertise required to lead research efforts and recognize unique business processes which may benefit from AI-enabled technology.

Policymakers must recognise the dangers of glacial-paced government intervention in enabling AI solutions as it would force technology driven institutions to venture into the new digital world without accountability or transparency. The government must re-align the triple helix partnership concept if it is to make any real contributions to the country. Policymakers must ensure their focus on educating the masses does not come at the cost of delayed AI governance in the financial sector.

In 2019 the Government of Bangladesh released the draft version of its National Strategy for Artificial Intelligence, a 5-year plan to introduce and implement digital solutions across the country. Policymakers in Bangladesh introduced a progressive and sustainable approach to introducing AI-enabled technology in the country.

In contrast to Pakistan’s mass awareness programs, Bangladeshi policymakers recommended institutional promotion and awareness followed by sectorial strategies. Under this approach, institutions will be advised to adopt AI solutions based on their capabilities and level of readiness in streamlining core business processes in line with latest trends in the global digital market.

Pakistan has maintained a conservative approach in addressing certain underlying realities associated with digital transformation, in stark contrast to global examples of inclusive AI policies.

The governments short-term focus on educating the mass population has left the technology-driven financial sector out of the policy’s primal focus. Policymakers must ensure adequate stakeholder representation from the financial sector in the revision stages of the National AI Policy draft.

The article does not necessarily reflect the opinion of Business Recorder or its owners

Arwa Farrukh

The writer is a Public Policy graduate from the Suleman Dawood School of Business, LUMS and is currently working in the IT Governance department at a bank in Pakistan


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