As mentioned above, the lower access to formal financing in Pakistan can be considered as a potential opportunity for the FinTechs to tap but it is also considered as a blockage for targeting the customers. For instance, according to a study by GSMA 4 out of 5 adults in Pakistan are financially excluded ⁽¹⁰⁾. Additionally, indicators by Karandaaz suggest that digital financial inclusion stands at 13% of the adult population but the concept understanding of mobile money is still significantly low depicting a decreasing trend as compared to previous years ⁽¹²⁾. Previous research data also depicts that 9% of the adult population do hold mobile money accounts ⁽¹²⁾, but the percentage of females who have mobile money account is 3 times less than men in the country ⁽¹¹⁾. The underlying reason for a lower formal accounts and mobile money accounts can be attributed to lower literacy rate ⁽⁸⁾ that results in less ability of people to comprehend and use financial technology. With the absence of basic numeric literacy people in the country are also far behind in terms of digital literacy ⁽¹⁰⁾ that curtails expansion of mobile money account users. This whole complicated scenario results in entry barrier for FinTechs as they cannot target the untapped market which is estimated to underserve more than 100 Million adults and more than 3 Million small scale businesses ⁽¹³⁾ currently.

It is also important to mention that FinTechs specially those operating at large scale tend to focus only on tech-savvy and literate audience missing out on the largest chunk which is severely underserved. FinTechs need to understand that a financial solution needs to be in simplest form for the audience to feel comfortable about it that would result in mobilization of technological use. Moreover, because FinTechs in the country have to deal with the vulnerable and financially excluded population of the society they need to introduce products that are simple, easy to use and allows customers to anticipate financial changes and shocks. If, the FinTechs offerings have these inherited properties that offers maximum benefits in the simplest format only then they can attract customers at the base of the pyramid ⁽¹⁴⁾.

Talking more about the product and product designs, interestingly another challenge for Fintechs and traditional financial institutions arise from the technology and digital solutions directly ⁽¹⁵⁾. Lack of innovative product design that also offers in build data security feature acts as a barrier to the new market entrants and is a threat to existing financial technology players. Moreover, the existing market players despite providing efficient services lack customer trust. For instance, digital and branchless banking services offered by leading telco banks offer customer convenience, doorstep, and easy to access services ⁽¹⁶⁾ still results in low satisfaction of the customers due to lack of timeliness and errors in the payment processes. One key reason for lower customer satisfaction can be attributed to the fact that customers’ behaviour and expectations have evolved now. The loyalty level of traditional customers has vanished, and the attitude of the consumers has become democratic where they prefer to opt for the digital product offering them the highest benefit ⁽¹⁷⁾. Therefore, this situation is considered as a severe warning to the financial institutions that they can lose businesses’ productivity if they do not implement the latest technologies that are now the need of today’s customer.  

Lastly, it is important to highlight that talent (strategic work force) which is essential for successful operations of FinTechs unfortunately lacks in Pakistan ⁽⁶⁾. Although, some sources do identify that there isn’t any lack in quantity of talent but the quality of talent that misaligns with the objectives of FinTechs ⁽³⁾. For this, an ongoing support from universities is necessary to prepare the future market workforce with the right skills that speak for its quality.

In conclusion, FinTech industry in Pakistan can be still considered in its embryonic stages facing several bottlenecks and challenges which demand considerable attention. In order to cope up with the mentioned challenges there is a need to address them via advocating them at national level, creating awareness at national and international forum, research investigations and brining all the FinTech players at one platform for sustainability of the FinTech ecosystem. Only by co-creation process it is possible that all stakeholders formulate a collaboration that creates joint value for each player benefitting them individually as well as the system as whole.