By Muhammad Soban ISLAMABAD, March 18 (INP-WealthPK): The trend of using modern technology in each sector of the economy is growing apace. This trend has also favorably affected the financial sector of Pakistan. According to Reza Baqir, Governor State Bank of Pakistan, electronic banking transactions in Pakistan exceeded $500 billion in the FY 2020-21, more than Pakistan's gross domestic product (which is $370 billion). These statistics show that by using technology, Pakistan is on its way to a digital economy. The financial sector around the globe is witnessing a shift towards digitization.  Growing internet penetration is revolutionizing how businesses and consumers gain information, share transactions, and manage day-to-day operations.  Consumer behavior is changing due to digital connectivity, which is tilting increasingly in favor of convenience, cost savings, and customized retail experiences. Pakistan’s financial sector is the fastest-growing sector of the economy. The financial sector in Pakistan started adopting technology in the 1990s. It has evolved with the passage of time and adopted new technologies to introduce new services using technology. The State Bank of Pakistan (SBP) has taken various initiatives to increase the electronic banking system in Pakistan. According to the Annual Payment Systems Review (PSR) for the fiscal year 2020-21 issued by the SBP, digital financial transactions have experienced a rapid growth in Pakistan. In the fiscal year 2020-21, overall e-banking transactions grew by 31.1% YoY, demonstrating the increasing acceptance of digital payment methods. There is great potential for digital financial transactions as Pakistan has 180 million smartphone users, while only 80 million people have bank accounts. Through the adoption of new technologies and initiatives like ‘Raast’ Pakistan can expand digital finance to the majority of the population. The SBP has been trying to boost financial inclusion in Pakistan through various ways. During the pandemic of Covid-19, the SBP eased the internet banking regulations. Almost all banks are now providing digital banking facilities with a diversified menu of services. Digital wallet services are also expanding all across Pakistan. The SBP is also collaborating with the NADRA to make it possible for people to submit their biometrics remotely for opening bank accounts. Furthermore, the SBP has launched Raast Program that will open a new era of digitization of the economy. It will help Pakistan’s economy to shift from a traditional informal economy to a formal economy. Talking to WealthPK, Dr. Abdul Jalil, Professor of Economics at the Pakistan Institute of Development Economics, Islamabad said, “It is a very positive sign that technology is being used in the financial sector. Pakistan has been trying to digitalize its economy for more than a decade”. He added, “It will benefit Pakistan’s economy in different ways. Each and every transaction of the economy will be recorded which will lead to increase transparency and reduction in corruption”. On the time frame of the digitalization economy, Dr. Jalil told WealthPk, “It will take a long time to make Pakistan’s economy fully digital”.