Mashreq Bank’s Digital Transformation Plans for Pakistan

Mashreq, a worldwide digital banking institution based in Dubai, is poised to revolutionize Pakistan’s financial sector by shifting its focus from conventional brick-and-mortar branches to digital platforms.

A crucial component of its expanded operations in Pakistan involves a significant initiative to digitize the inflow of remittances from Pakistani workers in the UAE and other global regions. The bank’s objective is to create seamless connections between Pakistanis abroad and their loved ones at home.

According to Muhammad Hamayun Sajjad, CEO of Mashreq Pakistan, the bank is heavily invested in streamlining the process of bringing remittances into Pakistan. He highlighted this objective during a recent interview.

The Pakistani diaspora in Dubai and other parts of the UAE annually remits approximately $6.25 billion to $6.50 billion to their families in Pakistan. Mashreq already plays a crucial role in facilitating a substantial portion of these remittances through collaborations with other financial organizations.

Sajjad explained that Mashreq is creating a rapid, user-friendly, and reliable financial link between Mashreq Dubai and Mashreq Pakistan, which will ensure instant receipt of remittances. The immediate goal is to migrate the remittance flow from Mashreq Dubai to their Pakistan-based platform.

He further added that their secondary goal is to identify and resolve any issues in the current remittance process within Pakistan. By learning from these shortcomings, they intend to improve the overall user experience, seeing a considerable opportunity to simplify remittances, which are vital for the country’s financial stability.

Mashreq brings six decades of expertise in serving individuals and businesses in major international markets, spanning the Middle East, the US, the UK, and Europe. Currently, they are conducting a pilot program in Pakistan, paving the way for launching a complete retail digital bank by the end of December 2025.

Mashreq Dubai manages three entities in Pakistan: Mashreq Bank (currently in its pilot phase), Mashreq Global Network (responsible for employee recruitment and management), and a branch office of Mashreq Financial Institutions Group (offering banking solutions to other financial institutions). Over the past four years, they have collectively invested over $70 million in Pakistan, with plans to reach $100 million by the close of the year.

Trade Finance

Besides remittances, Sajjad mentioned the bank’s involvement in trade finance. He clarified that although their Pakistan license doesn’t yet permit trade transactions, Mashreq Dubai will continue to manage trade flows with Pakistani banks. The bank is recognized among the top six global financial institutions for US dollar clearing and acts as a trade hub across 14 nations.

Once fully licensed in Pakistan, Mashreq intends to broaden its trade services locally within the next three to five years. In the interim, their primary focus is on creating efficient and dependable financial channels between the UAE and Pakistan.

Separate Platforms for SMEs and Youth

Acknowledging that most banks typically serve SME clients through standard individual or corporate platforms, which often don’t cater to the specific requirements of small businesses, Sajjad announced the launch of Mashreq Neo Business. This is a specialized app and portal tailored exclusively for SMEs.

Mashreq will also introduce digital joint accounts for individual customers, eliminating the necessity for branch visits. In addition, they are launching Mashreq Neo NXT, a separate digital platform designed for youth under 18. Although minors cannot hold full bank accounts, Neo NXT will facilitate supervised banking for savings and spending, managed by parents, thereby encouraging financial literacy from a young age.

Cybersecurity and AI as Success Factors

Mashreq underscores the importance of a strong cybersecurity framework supported by advanced AI-driven monitoring and fraud detection mechanisms. Their systems align with the digital banking regulations set by the State Bank of Pakistan (SBP), which include controls for irregular transactions. For example, automated alerts, such as phone calls for transfers exceeding Rs2 million, enhance customer safety.

Leveraging its digital infrastructure from the UAE, Mashreq plans to replicate this model in Pakistan to cultivate trust and institutional credibility within the evolving digital banking landscape.

Sajjad noted the significant potential within Pakistan’s digital banking sector. He cited SBP data indicating that while Pakistan has between 90 and 100 million account holders, only 20 million actively use online banking services. This leaves a substantial untapped market of 70 million potential users. He believes that existing banks face challenges with high costs and limited digital efficiency, with users still struggling with issues related to fraud, access, and reliability. A modern, digital-only bank like Mashreq is well-positioned to address these gaps efficiently and cost-effectively.

Currently, almost 500 Pakistan-based professionals, 43% of whom hold senior positions, work remotely for Mashreq Dubai across 18 cities, despite the bank lacking a physical local presence.

Mashreq Pakistan operates with a leaner team of 250-300 employees, in contrast to the thousands employed by traditional banks. By operating remotely without physical branches and maintaining a smaller workforce, the bank significantly reduces its operational expenses.

Mashreq also recognizes the substantial growth of Pakistan’s e-commerce sector in the last 12 to 15 years, noting a pronounced shift in consumer behavior towards digital purchases over traditional retail.

The bank sees immense opportunity in this trend, anticipating that the increasing digitization of payments will fuel the growth of e-commerce. Mashreq’s infrastructure and strategic partnerships are well-equipped to support the expanding ecosystem of e-commerce payments, logistics, banks, and platforms, ensuring seamless adoption for consumers, Sajjad concluded.