KARACHI: Pakistan’s financial sector is witnessing a troubling spike in digital fraud, with an alarming increase in digital banking fraud complaints, as revealed by Banking Mohtasib Pakistan (BMP) Sirajuddin Aziz. Addressing a press conference during the release of BMP’s Annual Report 2024, Mr. Aziz highlighted an alarming rise in customer complaints related to digital and mobile banking platforms, with monetary relief amounting to Rs1.65 billion provided to affected individuals.
Digital Growth Fuels Fraud Spike
The rapid adoption of digital banking tools, while a sign of technological progress, has unfortunately led to a parallel increase in fraudulent activities. “A significant increase was recorded in fraud-related complaints and unjustified account blockages by banks,” Mr. Aziz stated.
He added that the rise was not solely due to technological growth but also reflected systemic inefficiencies in banking services. “During calendar year 2024, a major increase was seen in complaints of fraud and cases of account blockage by banks on one pretext or the other,” he said.
Over 41,000 Complaints Handled in 2024
The BMP dealt with 41,546 complaints in 2024. This included cases pending from the previous year. Out of these, 27,753 complaints were resolved, resulting in Rs1.65 billion in relief, a noticeable increase from Rs1.26 billion in 2023.
Since its establishment in 2005, the BMP has disbursed a cumulative Rs8 billion in compensation to banking customers.
As digital banks enter Pakistan’s financial landscape, Mr. Aziz emphasized the need for enhanced oversight and capacity building. He noted that newly established digital banks are now included in BMP’s jurisdiction, necessitating specialized Fintech-trained staff and operational upgrades.
“This calls for enhanced staffing and capacity building, particularly in Fintech-related operations,” he said.
Awareness Campaigns Falling Short
Despite efforts to educate consumers about fraud through media campaigns, Mr. Aziz criticized the ineffectiveness of public awareness initiatives by banks. “Banks’ efforts to meticulously educate the public through electronic and print media to protect them from frauds and forgeries have failed to bring effective results,” he remarked.
He urged banks to “redouble their efforts to better protect customers from digital scams and forgeries.”
As Pakistan navigates its digital banking evolution, the recent surge in fraud complaints serves as a wake-up call for regulators, financial institutions, and consumers alike. While the BMP continues to play a crucial role in safeguarding user rights, the responsibility to create a secure digital ecosystem must be shared across the financial sector.
