According to a recent report released by a policy-making body in Islamabad, to strengthen artificial intelligence and digital finance systems in Pakistan, mere temporary digitization will not be enough, but fundamental institutional issues will have to be addressed. The Pakistan Institute of Development Economics (PIDE) on Tuesday stressed that the country's emerging technology sector cannot sustain sustainable growth unless regulators ensure transparency, protection of consumer rights and strict accountability.

A typical Pakistani consumer who uses mobile wallets, online banking apps or digital credit systems in daily life often faces technical hurdles and delays in redressal of complaints. PIDE's latest recommendations make it clear that the growth of digital finance is not only dependent on the increased use of smartphones, but the real question is whether consumers fully trust the digital infrastructure that is handling their hard-earned and personal data.

##Lack of trust in fintech

Pakistan's fintech sector has expanded rapidly over the past few years, mainly due to the digital services operating under the influence of State Bank of Pakistan and the trend of a young population. However, failed transactions, hidden charges and lengthy complaint resolution procedures have frustrated many customers.

When a digital wallet experiences a technical glitch or an unauthorized deduction, customers often have to go round call centers. PIDE says that without strong institutional oversight, these issues undermine consumer confidence, forcing people to revert to cash and undermine national goals of financial inclusion.

Requirements for using artificial intelligence

The report also emphasizes that the use of automated systems and algorithms in taxation, credit assessment and government services requires strict monitoring. If automated decisions are implemented without any transparent audit, it may become more difficult for disadvantaged sections to access loans or government assistance.

What you should do

If you use digital wallets, mobile banking or online platforms in Pakistan, you should take the following precautions to protect your financial interests:

  • Mandatory enable two-factor authentication (2FA) on all your financial applications.
  • Review your account history regularly and report any suspicious transactions to your bank or State Bank help desk immediately.
  • Save screenshots in case of transaction failure or error to serve as evidence when filing a formal complaint.

What to look forward to

Watch how the State Bank and the Securities and Exchange Commission (SECP) react to these policy recommendations. Changes in data protection laws and digital banking regulations in the coming days will decide whether Pakistan's digital economy moves in a safe direction or not.