Business Recorder
Once upon a time, a bank branch was a temple of trust. Its marble counters reflected authority, the tellers’ ledgers whispered certainty, and the vaults promised permanence. Yet today, in the corridors of Pakistan’s boardrooms and amidst the tap-tap of mobile screens, a new question hums: Are branches relics of a bygone era? Pakistan’s banking sector stands at a crossroads. Traditional stalwarts—Habib Bank Limited (HBL), United Bank Limited (UBL), Bank Alfalah, Allied Bank Limited (ABL), MCB, and Standard Chartered Pakistan— together operate over 20,000 branches , augmented by nearly 21,000 ATMs and 763,000 branchless agents . But the digital tide is rising. According to the State Bank of Pakistan (SBP), 92% of retail transactions in late 2025—amounting to 3.4 billion transactions worth Rs167 trillion —were conducted electronically. Mobile wallets like JazzCash and Easypaisa, alongside instant payment rails such as Raast, are no longer novelties; they are lifelines. Also read: Policy with purpose: Backing FOB to boost dollar reserves Yet numbers tell only half the story. Cash still dominates everyday life for many, while high-value transactions, small and medium enterprises (SME) lending, mortgages, and wealth management still hinge on human relationships nurtured in branches. For a population where digital literacy varies, physical presence remains strategic, and trust cannot be coded in an app. The digital frontier is expanding. Under the SBP’s 2022 framework, fully digital banks—Hugo Bank, KT Bank, Mashreq NEO, Raqami, and Easypaisa DB—have emerged. Early pilots are promising: some digital Islamic banks doubled their asset base in a single quarter , with deposits soaring from Rs0.06 billion to Rs1.48 billion , signaling rapid adoption. Yet advisory depth, complex product origination, and trust are hurdles these neo banks have yet to fully overcome. Globally, the lesson is clear: even in highly digitised markets, branches endure. JPMorgan Chase in the US opens 160 new branches (30+ states) in 2026 and 600 renovations, Bank of America plans 150 new centers by 2027 , and Wells Fargo invests heavily in renovation and technology. Branches evolve, becoming advisory hubs, catalysts for digital adoption, and centers of relationship-building. Strategic imperatives for Pakistani banks · Reposition branches as advisory hubs. Trim branch square-footage but deepen roles (wealth, SME, Islamic banking advice). For example, US banks now train “relationship bankers” in small-format branches to drive consultative sales. Pakistan’s banks should similarly staff branches with cross-skilled specialists. Branches can also host financial literacy/SME clinics, echoing Chase’s community centers for workshops. · Digital onboarding at branches. Use branches and banking agents as digital ambassadors to help customers open accounts and wallets on the spot. Integrate e-KYC/BIOMETRICS/QR code app installs so that even low-literacy users get introduced to e-banking by branch staff. India’s and Kenya’s experience shows assisted digital sign-ups lift inclusion. · CRM/AI personalisation. Deploy analytics to push appropriate products via mobile/USSD to existing customers, based on branch-vs-digital behavior. Banks can use branches to collect customer data (e.g. financial goals, business cycles) and leverage artificial intelligence to offer personalised loans or investment advice through apps and SMS. · Expand agents and partnerships. With 763k agent outlets, banks should deepen collaboration (on float, liquidity) to bring services to “the last mile”. Partnerships with telcos, fintechs and utilities can bundle bill pay, remittance and credit (e.g. linking BNPL, agri loans). Also read: The how, why, and what of government debt securities · SME-focused model. Use branch networks to target SMEs with combined branch+digital channels: for example, allow SMEs to schedule in-branch consulting but do routine payroll/payments online. Banks should streamline SME account opening (possibly via agents) and offer fintech lending partnerships. · Pricing and products. Competitive pricing on digital loans/payments can drive adoption (as SBP intends). Branch-based pricing (higher fees) should gradually shift to incentivise low-cost channels. At the same time, continue branch-based premium services (large cash and gold loans, commodity trading support). · Risk/compliance and talent. Build strong cyber-risk units to secure digital channels. Train branch staff on digital fraud trends. Recruit talent with fintech backgrounds into both branches and back offices to bridge the “digital divide.” If Pakistan’s banks are to endure—and expand—they must master the delicate choreography of a truly phygital model: one that trims excess in brick and mortar even as it amplifies digital reach. To over-invest in branches is to risk inertia and inefficiency; to lean too heavily into digital is to estrange the very customers for whom cash remains comfort, and human counsel, indispensable. The way forward is neither binary nor ideological—it is integrative. Branches must evolve beyond transaction counters into spaces of trust, advice, and financial awakening, while digital channels carry the burden of scale, speed, and seamless convenience. In this reimagined order, the branch becomes less a place of queues and more a theater of engagement—where financial literacy is nurtured, relationships are deepened, and complex decisions find human anchorage. Neo banks may command the language of velocity and simplicity, but legacy institutions hold something far more enduring: trust, built over time and touch. And so, Pakistan’s banking future will not be written in code alone, nor carved in stone, but composed in the quiet harmony between the two—a phygital symphony where innovation does not replace tradition but refines it. In this tale of marble and mobile, the answer is not to close doors but to open new possibilities: to branch, and to branch wisely . The article does not necessarily reflect the opinion of Business Recorder or its owners
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