Study of fintech value-chain in Pakistan and the opportunities for entrants in the fintech space
Master of Business Administration Executive
Faculty / School
Faculty of Business Administration (FBA)
Year of Award
MBA Executive Research Project
Fintech Value-Chain -- Pakistan | Fintech space | Fintech Ecosystem
The term Fintech which is a contraction of Financial Technologies, is a marriage of financial services and information technology (IT). It is a new paradigm in today's business world for providing financial services more efficiently by incorporating effective IT. FinTechs are also used to describe various innovative business models and emerging technologies that have the potential to transform the financial services industry with its game changing and disruptive nature by cutting costs and creating more diverse and improved financial landscape. This Fintech ecosystem is growing every year and the market is filling up with more such fintech startups trying to address customer's needs and shaping the future of financial markets. Pakistan belonging to an emerging market currently lack financial inclusion compared to other countries in this market and has therefore placed significant emphasis on efforts to spur development in this area. Yet the journey is long and there are numerous opportunities for young entrepreneurs to explore this new phenomenon and increase access to capital thereby increasing economic growth in the country. This is possible with Pakistan's large tech savvy population and the behavior in general according to which they increasingly expect to manage their finances on the go from sending international payments to applying for a mortgage using technology. During literature survey, it was found that no assessment from the point of view of an entrepreneur is yet done for FinTechs Value-Chain in Pakistan. There are few surveys and researches on the emerging trends, but a comprehensive understanding is yet unexplored. This report is an effort to understand the extent of progress made in Pakistan in bridging the gap between new fintech innovators, established financial institutions, technology developers and all the players involved as it clearly identifies the mutual benefits that the players enjoy bringing greater digital and financial advancement for consumers. More important question is to understand the impact of FinTechs on financial institutions and how these companies will benefit from FinTechs. The thesis is an endeavor to explore the various opportunities for the young entrepreneurs of today in this space and reveals that with the rapidly forming new habits and new priorities for the consumers, the financial landscape needs digital overhaul. For this research, qualitative and quantitative approach was adopted based on primary and secondary research. Data was collected from 147 respondents through surveys and interviews targeting two stakeholders namely consumers and industry professionals from diverse backgrounds to assess the value chain for FinTechs and variables like willingness, awareness. regulations and partnerships, etc. 55 sources including online articles, journals and reports were referred to as part of secondary research for detailed elucidation on how the consumer trends are changing providing an opportunity for financial services to evolve globally and in Pakistan to understand the experts view and different financial and technological terms. The results of the study show that 40% consumers are digital and financial savvy while 55% prefer banks over FinTechs. This is majorly due to lack of awareness and trust de-emphasizing that banks are failing consumer needs and FinTechs are required to innovate their revenue streams. Therefore, entrepreneurs interested in Fintech startups are faced with various challenges including technology adoption by consumers, conservative attitudes. lack of collaboration, regulation and funding’s, data security and protection risks involved in faster uptake of FinTech phenomenon and economic evolution. These research insights are helpful in driving better solutions for accelerating the FinTechs business and financial inclusion in Pakistan in the form of a framework and guidelines for entrepreneurs and all the players of FinTechs ecosystem. Progress and dynamic mind o: with key regulatory changes are recommended for transformation of financial services in Pakistani underscoring, the need for collaboration and support from global investors. According to the Founder and CEO of FinSurgents, Qasif Shahid: “What mobile apps are to smartphones, FinTechs are to financial service providers"
Shah, A. K. (2018). Study of fintech value-chain in Pakistan and the opportunities for entrants in the fintech space (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/research-projects-emba/81
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