Owais Zaidi on the Fintech Landscape of Pakistan

Owais Zaidi is the man behind the first Pakistani VC funded company in 2000 called 2B Technologies in call center and CRM space; he has managed the first third party Payment network in Pakistan covering over 15,000 merchants and running Visa/MasterCard/Private Label programs. He has also run the first managed loyalty platform with market share of over 90% in 2000’s and built the first cloud based Mobile payments platform in the emerging markets in 2008. He has also co-founded the first and only fintech incubator of the country, called the Fintech Factory.

You have co-founded the first and only fintech incubator of the country. How do you see the fintech landscape evolving and what is the potential?

Fintech is not like other domains; it requires deep domain understanding, access to proprietary platforms and regulatory understanding. The potential is huge as Pakistan is struggling to democratize the financial offerings. Our National Financial inclusion goal was 50% by 2020 and we have only reached 20% so far. The upside for entrepreneurs bringing financial solutions is huge with the right guidance and capital availability. Unfortunately both are in short supply. We are trying to address the training, platform availability and guidance issues primarily with assistance in acquiring capital.

In your view, what are some of the areas that offer potential based on people’s needs for startups to offer sustainable and scalable solutions?

Within fintech, the scope is huge. There are so many steps in financial inclusion – entrepreneurs can look at building interesting use cases, or customer experiences that will create compelling reasons for the excluded to jump on the bandwagon. There has been so little done that we have immense opportunity across the spectrum, from use cases for wallets, savings, micro investments, insurance, bill payments, infrastructure services, inclusion etc.

Considering that the opportunities for bridging gaps in the country’s financial ecosystem are incredible, what do you think are some steps that need to be taken to allow the fintech industry to grow?

I think two key things are around capital and regulatory structures. SECP and SBP need to streamline the process for controlled experiments through simplified registration in regulated categories and a sandbox environment. There is a huge Chicken and Egg problem today, you need huge expenditure to obtain a license, register your financial company, get fit and proper testing for key executive staff, capitalize the corporation and then commence business. This is the exact opposite of what is required, you want to execute fast and fail fast so you can learn and see if there is a product market fit. The current environment excludes any such possibility. If we allow for a regulatory sandbox, which will enable startups to do quick turnaround experiments without going through the whole process albeit in a controlled way, they can establish viability of the idea and then raise funding relatively easily and go through the rigmarole of regulatory environment.

After having interacted extensively with fintech startups, what do you believe are aspects aspiring and existing fintech startups need to consider to realize the potential that the fintech industry has to offer?

The potential is there like for any other industry and domain across the country, but the regulatory and structure challenges are really holding back a mass uptake and interest in this domain.

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