CONVERSION OF BRANCH BANKING INTO E-

BANKING: A CASE STUDY ON NBP

Submitted by:

NADEH ALI MIR

ERP ID: 13858

MBA Executive- Batch 12

1st Project Report

I
 Table of Contents
Page No.
List of Figures.......................................................................................................................................I
List of Tables.......................................................................................................................................II
Acknowledgements.............................................................................................................................III
Executive Summary............................................................................................................................IV
Chapter 1: Introduction........................................................................................................................1
Chapter 2: Literature Review...............................................................................................................2
Chapter 3: Research Methodology.......................................................................................................3
Chapter 4: Results & Analysis.............................................................................................................4
Overview of Interviews................................................................................................................4
Overview of Focus group.............................................................................................................4
Chapter 5: Conclusion & Recommendations.......................................................................................5
References...........................................................................................................................................6
Appendices..........................................................................................................................................7
Transcript of Interviews...............................................................................................................7
Transcript of Focus group............................................................................................................7

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III
 Chapter 1: Introduction

INTRODUCTION ABOUT THE BANKING SECTOR IN PAKISTAN:

In Pakistan, the total number of banks currently active in the banking industry are 33 in
number. Among these, there are nine that are public sector while four banks in Pakistan are
foreign banks, while the rest 20 is the domestic private banks. Mostly, in the banking
industry, the business is only focused between few banks only. In the Pakistani banking
industry, only six banks are the major competitors in the economy, and thus they hold a
major portion of assets in the overall banking industry of Pakistan. To be more precise,
about 57 percent of the total deposits and 53% of the loans are in these banks. These banks
are:
1. Habib Bank Limited
2. National Bank of Pakistan
3. Allied Bank Limited
4. United Bank Limited
5. MCB Bank Limited
6. Bank Alfalah Limited

The banking industry of Pakistan is monitored by the State Bank of Pakistan. The SBP
regulates the local banks within the scope of its prudential regulations. Furthermore, almost
all banks adhere to the international Basel III standards. There is a huge potential in this
industry. The total number of bank accounts are 43 million within a population of 202
million. Behind this huge difference, the major cause that has been highlighted in a number
of different researches is that the is a lack of access to technology to the masses in the
country, furthermore, due to the religious concepts regarding banking have also created an
invisible barrier in the growth of the banking industry. Thus, a major portion of the rural
population has been left unbanked. Keeping this under consideration, there is massive
growth potential for the overall industry, primarily due to the reason that today Pakistan has
a well- developed telecom industry that is paving the way for high-speed internet and faster
connectivity. Not only is this but the Islamic banking industry also a very budding field that
is growing with a steady pace in the Pakistani economy. Also, the masses are also becoming
aware of the benefits of keeping deposits in banks as well.
In order to assess the performance of the overall industry, we must discuss the statistics from
past to present. Given below are the figures from 2009-2019:
I. Total assets raised to PKR 15,134 billion from 6,516 billion.
II. The deposits increased from PKR 4,786 billion to PKR 11,092 billion.
III. The advances rose from PKR 3,240 billion to PKR 5,025 billion.
IV. There was a huge increase in investments since 2009, from PKR 1,737 to PKR 7,625.

All these tremendous changes have occurred during the period when the prudential
regulations were quite suffocating for the banks in a highly competitive industry. In the past
decade, the conditions for working in the industry were made very tough by SBP, therefore
it was very difficult for banks to keep running their operations smoothly.
The China Pakistan Economic Corridor CPEC has bought some changes in the market

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dynamics due to the reason that there is an increased amount of infrastructural
developments. Even though the scheme of loans for CPEC has only been settled between a
few Chinese banks, UBL and Habib Bank only but further changes and growth of
infrastructure will be beneficial for other banks as well.
For any country, the banking sector always plays a vital role in the development of its
economy. State bank working as the central bank and the regulator of the banking system in
the country, it is their responsibility to disseminate proper and timely information to all the
banks in Pakistan. The bifurcation of Pakistani Banks are as under:
 Public Sector Banks: Those banks working in Pakistan who have their capital and
shares controlled by the Government are termed as the public sector banks.
 Public Sector Commercial Banks: The major activities of these banks include the
mobilization of deposits along with advancing loans to via their branches. Usually,
these banks deal in the short-term collateralized loans for example trade financing
as well several different banking services as well. Liberalization of banking laws and
regulations have made easier for commercial banks to undertake few activities such
as portfolio investment, underwriting, securities market operations, and other
services as well.
 Specialized Banks: Specialized banks provide credits, advice, and assistance in any
sector. These sectors include SMEs, industrial and agriculture sector. The basic
function of these banks is advancing loans and therefore may not be indulged in
any other banking activities like other commercial banks. Their banks are operating
according to special legislative acts instead of banking laws for other banks.
 Domestic Private Banks: In Pakistan, those banks that are held and controlled as a
local business entity are termed as the domestic private banks.
 Foreign Banks: Those banks who have headquarters abroad while they are having
branches in Pakistan are termed as foreign banks.
 Islamic Banks: In order to promote the Islamic banking in Pakistan, State bank of
Pakistan issues special guidelines as per BPD circular No. 1 of 2003, January.
According to this document the basic strategy adopted for the banks was as follows;
o Full-fledged Islamic banks should be established by the private sector
o Establishment of the subsidiaries of the foreign Islamic banks in Pakistan
o Standalone branches for providing Islamic banking services should be
initiated by the existing commercial banks
o All branches of Islamic banks, standalone branches of commercial banks
along with the subsidiaries of foreign banks should offer only products are
services that are shariah compliant.

In Pakistan, a total of 33 scheduled banks is operating till the end of December- 2018. The
table given below describes the network of branches in detail:

Table 1. COMPARATIVE POSITION OF NUMBER OF BANKS AND BRANCHES IN

PAKISTAN

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 December- 2018
Group or Type of Bank
Banks Branches
1. Pakistani Banks 29 13,683
a. Public sector 9 3,198
Commercial 5 2,543
Specialized 4 655
b. Domestic Private 20 10,485
2. Foreign banks 4 9
Total 33 13,692

Table 2. PROVINCE WISE SHARE OF SCHEDULED BANKS W.R.T LOANS AND

DEPOSITS

December- 2018 (Values in %age)

Region/Province
Deposits Advances
Punjab 43.5 45.2
Sindh 31.4 43.6
KPK 7.9 1.0
Baluchistan 2.4 0.2
Islamabad 11.7 9.8
FATA 0.2 0.0
Gilgit 0.4 0.1
AJK 2.5 0.2

Table 3. GROWTH RATE

Growth Rate (Values in Percentage)

Region/Province
Deposits Advances
Punjab 5.84 15.39
Sindh 1.43 9.9
KPK 11.57 26.18
Baluchistan 10.96 -43.99
Islamabad 13.29 22.08
FATA 28.23 31.83
Gilgit 19.06 15.54
AJK 7.39 -1.98

There has been outstanding growth in the previous period ending on December 2018. The
highest growth percentage has been observed in the FATA region 28.23% while Gilgit
Baltistan province was second 19.06%, followed by Islamabad 13.29%, KPK, 11.57%,
Balochistan 10.96%, Azad Jammu Kashmir 7.39% followed by Punjab 5.84% and Sindh
with the least growth rate of 1.43%. There has been a positive increasing trend in the
growth rate of advances as well i.e. 12.74%. Meanwhile, FATA and Baluchistan had
negative growth for advances in the previous period.

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Table 4. KEY STATISTICS OF SCHEDULED BANKS AT A GLANCE

Items December- 2018 (Billion Rs.)

Number of Banks 33
Public Sector Commercial Banks 5
Domestic Private Banks 20
Foreign Banks 4
Specialized Banks 4
Number of Branches 13,692
Total Liabilities/Assets 28,815
Cash 1,424.8
Total Deposits (Excluding interbank) 12,649
Number of Accounts of Deposit Holders 53,111,547
Average Deposits per account (Thousand Rs.) 238.2
Total Advances (Excluding Interbank) 7122.8
Number of Accounts of Borrowers 3,298,472

Nowadays, banking through digital means has become very common. The alternative
means of funds transfer enables quick delivery of banking services to users in real-time.
Since Pakistan Real Time Interbank Settlement Mechanism (PRISM) is the only large-
value payment system that is currently operating in Pakistan. This helps in the transfer of
interbank funds that have high value and also increases the overall efficiency of the
payment system for large transactions. On the other hand, the retail payment side has a
number of e-banking channels that help in the transfer of funds via Real-time online
branches (RTOBs), mobile banking, internet banking, call centers, ATMs, IVR, and e-
commerce. All of these facilitate retail value payments.

Table 5. COMPARATIVE SUMMARY OF PAYMENT SYSTEMS

Quarter 2- FY19 Quarter 3– FY19

Payment (Volume in Million & (Volume in Million & Percentage Change
Systems Value in Trillion PKR) Value in Trillion PKR)
Volume Value Volume Value Volume Value
PRISM 0.7 98.3 0.6 107.1 (10.4) 8.9
e-Banking 217 14.7 217.7 14.8 0.3 0.6
Paper-based 120.7 36.5 117.2 35.4 (2.9) (3.1)
Total 337.7 149.6 335.4 157.3 (0.7) 5.2

The total amount of payment transactions had a decreasing trend of 0.7% as compared to
the previous quarter which was having an increasing trend of 5.2%. There was a 10.4%
decrease in the value of PRISM transactions. Also, e-transactions had an increase of
0.3%.

Table 6. PAYMENT SYSTEMS IN PAKISTAN

Details as on March 31st- 2019

Total Population 207.77 Billion
Currency in Circulation Rupees 4.8 Trillion
Number of Bank Accounts 53,111,547
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 Payment Systems Infrastructure as on 31st March 2019
Commercial/Specialized Bank Branches 14,383
Microfinance (Branches) 1,166
Number of Real-Time Online Branches (RTOBs) 15,408
Number of banks having ATM machines 33
Number of banks having POS machines 9
Number of banks providing Internet Banking Services 27
Number of banks providing mobile phone banking services 23
Number of banks providing call center banking services 22
Total Number of PRISM System Participants 45
Total Number of ATMs Interoperable Switches 1
Total number of Cash Deposit Machines (CDMs) 49

Table 7. PAYMENT SYSTEM INFRASTRUCTURE

Number of: Quarter -3 FY19

Commercial banks 34
Microfinance Banks 11
Development Finance 8
PRISM Participants 45
Banks 33
MFBs 3
DFIs 8
Non-Bank 1
All Banks/MFBs Branches 15,549
Real-Time Online Branches (RTOBs) 15,408
ATMs 14,575
a. Onsite 11,878
b. Offsite 2,692
c. Mobile 5
POS Machines 55,240
Internet Banking Users 3,113,399
Mobile Phone Banking users 5,045,263
Call Centers/IVR Banking Users 30,853,027
E-Commerce Merchants (Registered with Banks) 1,398

Table 8. COMPOSITION OF PAYMENT CARDS

Number of Quarter-3 FY19

Debit Cards 23,972,022
ATMs only Cards 8,692,010
Social Welfare Cards 7,777,839
Credit Cards 1,555,508
Pre-Paid Cards 227,487
Total 42,224,866

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Table 9. ATM TRANSACTIONS

Quarter-3 FY19
Transaction Type (Volume in Million & Value in Billion PKR)
Volume Value
Cash withdrawals 124.5 1,434.5
Intra-bank 2.2 76
Interbank Funds Transfers 1.8 87.4
Utilities Bill Payments 1.9 3.2
Cash Instrument Deposit 0.1 5.2
Total 130.5 1,606.4

Table 10. INTERNET BANKING TRANSACTIONS

Quarter – 3 FY19
(Volume in Million & Value in Billion PKR)
Transaction Type
Volume Value
Intra-bank Fund Transfer 2.1 94.5
Inter-bank 3.1 159.8
Utilities Bill Payments 2.8 15
Misc. Payment 0.7 92.9
Total 8.6 362.3

Table 11. MOBILE PHONE BANKING TRANSACTIONS

Quarter – 3 FY19
Transaction Type (Volume in Million & Value in Billion PKR)
Volume Value
Intra-bank Fund Transfer 3.2 110.3
Inter-bank 2.7 111.3
Utilities Bill Payments 5.3 4.7
Misc. Payment through Internet 0.7 45
Total 11.9 271.3

GEOGRAPHIC AND STRATEGIC LOCATION OF PAKISTAN:

Pakistan is located at a highly significant geo-strategic location. Pakistan is in South
Asia, at the junction of Middle East and Central Asia. The total land area of Pakistan is
881,913 km2 with a land boundary of 6,774 kilometers. The land boundaries are shared
with India in east, bordered with Iran in south west, Afghanistan in west, China is
northeast while Arabian Sea lies in the south. The current population of Pakistan is
204,828,301, while this population is 2.6% of the total world’s population. Total 39.8%
of the population is urban while 60.2% is rural. Thus, the population density is 265 per
km2.

Table 1. PROVINCE WISE POPULATION

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 Administrative Units Population
Punjab 110,012,442
Sindh 47,886,051
Khyber Pakhutunkhuwa 30,523,371
Baluchistan 12,344,408
FATA 5,001,676
Islamabad 2,006,572

Table 2. PROVINCE WISE LITERACY RATE

Province Male Female
Khyber Pakhutunkhuwa 73.3 % 38.5%
Punjab 72.2% 57.4%
Sindh 72.8% 49.9%
Baluchistan 73.0% 33.5%

Table 3. PROVINCE WISE SUBSCRIBERS OF CELLULAR OPERATORS

Khyber
Companies Punjab Sindh Baluchistan
Pakhutunkhuwa
Jazz/Warid 2,950,475 30,039,425 30,680,260 917,182
Ufone 2,522,177 9,693,451 4,623,495 790,086
ZONG 3,833,383 9,766,490 7,167,945 758,892
Telenor 5,025,309 18,872,450 5,425,014 714,600
Total 14,331,344 68,371,816 47,896,714 3,180,760

In order to discuss the relationship between the use of the latest technology and banking
facilities, initially some social indicators are considered for this study. These social
indicators include the population, literacy rate and cellular subscribers of cellular
operators. The data has been disseminated according to provinces so that better
understanding can be de developed. In Table 1, the population data for all administrative
units have been presented. According to the figures in Table 1. Around 48% of the
population resides in Punjab, followed by Sindh, KPK and Baluchistan province. FATA
region and the capital city Islamabad has the least amount of population in Pakistan.
Table 2. shows the province wise details of the literacy rate of Pakistan. It can be noticed
that in KPK, the male population is having the highest literacy rate as compared to all
other provinces. On the contrary, the Punjab province female population has a literacy
rate which is more than 50%. It can also be noticed that Baluchistan province’s male
population has the second-highest literacy rate, but the female population lacks behind
followed by KPK province.
Table 3. shows the density of the users of cellular operators in Pakistan. Punjab province
has the highest number of mobile phone users. Sindh, KPK, and Baluchistan provinces
have the highest number of cell phone users respectively apart from Punjab.
According to the latest figures issued by Pakistan Telecommunication Authority,
Pakistan has 76% teledensity in the country with a total of 161 million cellular
subscribers. Meanwhile, 69 million users 3G/4G are in Pakistan. Furthermore, currently,
71 million users are having a broadband facility.

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The conclusion that can be derived from the above discussion is that there is a high
density of mobile phone/internet users in Punjab along with a high percentage of literacy
rate as well. Furthermore, Sindh province has the second-highest population that is
currently using the facility of mobile phone and internet due to the reason that the
province has an adequate literacy rate. Meanwhile, however, KPK and Baluchistan have
high literacy rates for males and the lower literacy rate for females as compared to other
provinces, but due to low figures of the total population, these provinces lack in the
mobile phone and internet users.
NEED OF BANKING INDUSTRY IN THE ECONOMY:
To understand the need of the banking industry in any economy we first have to
understand how the banks work. The basic function of a bank is to be financial
intermediaries i.e. help individuals and companies to handle their money. Banks allows
individuals and businesses to invest in their banks and they then further use that money to
invest (lend) it to the customers. The profit is shared by both, the banks and the
customers.
Now that we know how banks work we see how it helps any economy grow up. For this
we will have to imagine a country without a banking industry. Without a banking
industry the customers will not have a possible way to lend a company which is in need
of finances. If the company does not get the finances to its needs, it will face hardship
doing the business it wants to do which will resultantly end up impacting the country’s
economy.
In the same way as of any business, banks also take investments from, and invest into the
government. When a bank takes investments from the government it helps the
government to generate more finances while the loan helps individuals and businesses to
fulfill their needs, where the businesses also earn a profit. When a bank invests into the
government it ends up helping the government develop an infrastructure of the country
which in turn provides better facilities to the people of the country, opening doors of
opportunities for them to do better business.
Banks have over the time developed to become a better intermediary channel than just
financial. The modern day banking allows its customer to not only work along and with the
national line of businesses but also with the international ones. Commercial banks play an
important role in the financial system and the economy. As a key component of the financial
system, banks allocate funds from savers to borrowers in an efficient manner. They provide
specialized financial services, which reduce the cost of obtaining information about both
savings and borrowing opportunities. These financial services help to make the overall
economy more efficient.
MAJOR ROLES OF COMMERCIAL BANKS IN A DEVELOPING COUNTRY:
The major roles a Bank plays in a company economy are as under:
 Mobilizing Savings for Capital Formation: People in developing countries have low
incomes but the banks induce them to save by introducing variety of deposit
schemes to suit the needs to individual depositors. To mobilize dormant savings
and to make them available to the entrepreneurs for productive purposes, the
development of a sound system of commercial banking is essential.

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  Existence of a Large Non-monetized Sector: A developing economy is characterized
by the existence of a large non-monetized sector, particularly, in the backward and
inaccessible areas of the country. The existence of this non-monetized sector is a
hindrance in the economic development of the country. The banks by opening
branches in rural and backward areas can promote the process of monetization in
the economy.
 Assistance in Monetary Policy: Commercial Banks help the economic development
of a country by following the monetary policy of the Central Bank. The Central Bank
is dependent upon those Commercial Banks for the success of the monetary
management in keeping with requirements of a developing economy.
 Commercial Banks Help in Financing Internal and External Trade: The banks
provide loans to wholesalers and retailers to stock goods in which they deal. They
also help in the movement of goods from one place to another by providing all
types of facilities such as discounting and accepting bills of exchange, providing
overdraft facilities, issuing drafts etc. They help by giving finance both exports and
imports of developing countries.
 Provision for Long-term Finance for the Improvement of Agriculture: Normally,
commercial banks grant short-term loans to the trade and industries in developed
countries. But in developing countries new businesses and improvement in
agriculture need long-term loans for proper development. Therefore, the
commercial banks should change their policies in favor of granting long-term loans
to trade and industries.
 Facilitating Financing various Consumers’ Activities: People in developing countries
do not possess sufficient financial resources to buy costlier goods like house,
vehicles etc. They help by giving loans to purchase these items which raise the
standard of living of the people in developing countries.
 Need for Sound Banking System: For the improvement of the banking system in a
developing country the following points need special stress:
o In developing countries, there should be proper facility of cheap remittance
facilities to enable the movement of funds from one place to another, so as
to meet the requirements of trade and industry.
o In developing countries loans should be given for productive purposes only
and not for consumption and speculative purposes.
o It will be better and encouraging if long-term credit is given to agriculture
and small scale industries.
o The use of cheques, drafts etc. is popularized among the people.
BANKS ROLE AS LENDER AND DEPOSITOR
Banks role of being a lender and depositor is very important to individuals and businesses
associated with banks. Let us assume again a world with no banks, where would companies
go to find individuals who want to invest? How would the businesses pay the money back?
Would the payback be timely? What if the business went bank corrupt and was not able to
pay back? Would an individual go to the business place to collect funds? How many would
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keep a check on the business’ performance?
To answer these questions we have a bank. A bank takes in huge sums of deposits from
customers of all sorts and lends out a huge total of fund to businesses individuals and
government. Had a bank not been there many of the businesses would suffer very badly due
to the lack of funds. The banks role when customer deposits money is equally important. If a
customer saves their money at home it will not grow and hence the worth of money might
eventually fall due to forces of economics. If an individual wants to invest but does not
know how to do so and cannot calculate the risk of investing themselves, they can invest it
in a bank and stay safer than they would have if they invested it themselves.
BANKS PRODUCTS AND SERVICES:
Most of the banking products and services are similar all across the globe however different
departments of a bank have different products and services to offer:

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BANKS PRODUCTS AND SERVICES RELATED TO INDIVIDUAL CONSUMER:
There are many services and facilities that a bank should and in many cases does provide to
the individual consumers. Each service or facility that a bank provides shows the credibility
and the loyalty of a bank towards the consumers while enhancing their reassurance from
their customers.

Liability Side of Balance Sheet Asset Side of Balance Sheet

The bank provides many services to a limited On its asset side banks have different facilities
number of customers and so the facilities are and types of loans which the consumers
not provided to the general consumer group. generally need and can avail.
ATM, debit cards, and credit card facilities are i. Auto loan being such a type of loan
offered to selected groups of customers while lets customer avail financing for
locker facilities are offered to only the account purchase of commercial/non-
holders. commercial vehicles. Most banks offer
A bank has over the time built different this type of loan so that it can cater the
products for its individual consumers so that need of generic public.
their multiple needs can be fulfilled. Individual ii. House financing is another type of loan
consumers, as discussed earlier, either want to (lease) for the individual consumers.
invest their money, save their money or want iii. Banks usually offer personal loans
to take a loan for their certain needs. which are small amounts for
i. Banks offers individual consumers the individuals with financial needs,
chance to open accounts such as business loans which are small to
current account for saving purposes medium loans for startups or struggling
which pays no interest and funds can businesses. These loans are term based
be added or withdrawn at any moment or fixed period installment based loans.
in time. iv. Ready Line– Banks offering unsecured
ii. Saving accounts can be made by the line of credit to individuals for meeting
consumers to earn profits on their personal needs. It is open line available
saving when they maintain a minimum to consumers and can be repaid or
balance in their accounts. availed as and when required for need.
iii. For investment purposes funds can be
put into fixed term deposits which
eventually earns the consumers profits
better than other accounts.

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BANKS PRODUCTS AND SERVICES RELATED TO BUSINESS:
Banking services related to business are similar to that of the individual consumers.

Liability Side of Balance Sheet Asset Side of Balance Sheet

On its liability side the bank offers its business On its assets side however banks offer many
clients few different options to invest their different services and facilities to business
funds. Main facility that banks offer to their consumers. Corporates can avail short term
businesses is fixed term deposits which allow financing for their businesses which are mainly
businesses to invest their excess funds in return used for the working capital requirements of
of profits. the business.
i. Banks around the world also offer
running finance facilities to their
business clients most of who avail this
offer to meet their day to day needs
for the purchase of materials or
payments.
ii. Pledge financing facility is exclusively
used to fulfill need to finance business
operations through procurement of
stocks
iii. Business a lot of the time are in need
to import or export goods in or out of
the country and for the supplier/buyer
to be trusted a LC (Letter of Credit) is
usually opened by the bank so that the
customer can do their business with
ease.
iv. FATR (Finance against Trust Receipt)
is one of the ways through which
business get their imported goods
financed. The imported goods are
released to the importer on the basis
of a trust receipt. Similar to this, FIM
(Finance against imported
Merchandise) is also used to finance
imported products. The bank releases
the imported goods on partial or lump
sum payments made by the borrower.

PRODUCTS AND SERVICES OBTAINED VIA E-BANKING, DIGITAL BANKING,

CELL PHONE
Since banking is about funds and financials, there is a large threat to converting it
completely to internet and phone services as the likelihood of fraud increases tremendously.
However with the increasing security of the internet more and more services are being
offered by banks to its customers through the internet module. Customers can use E-
Banking to:

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Customers can also get SMS and Email alerts of notifications and activity of accounts.
Customers along with these facilities have a 24/7 access to their accounts.
NATIONAL BANK OF PAKISTAN:
National Bank of Pakistan is a leading commercial Bank, established on November 08- 1949
under the NBP Ordinance 1949. It has been entrusted to act as an agent to the State Bank of
Pakistan; over the years, it has redefined its role into a modern growth-oriented commercial
Bank by expanding its business network across continents and by capturing large market
share in the debt equity market, corporate investment banking, retail and consumer banking,
agricultural financing and treasury services in Pakistan. NBP has international presence
through its branches and subsidiaries in the Far East, Middle East, South Asia, Central Asia,
Europe and North America.
NBP operates with the network of 1498 Domestic Branches, 21 Foreign Branches, 08 Local
& International Subsidiaries and Joint Ventures along with the AAA rating by PACRA and
JCR-VIS. Together, with its local and international offices, NBP provides commercial
banking services including corporate loans, investment banking, advisory, forex, global
remittances, underwriting, asset management, agency services, brokerage, leasing, Modarba
and such other banking & financial services. NBP believes in promoting financial inclusion
of the unbanked masses in the country, creating equal employment opportunities and
delivering its responsibilities as a good corporate citizen.
NBP PRODUCTS AND SERVICES:
The Bank functions in a highly competitive and regulated, but one of the most promising
market environment that offers significant growth opportunities. It proactively identify its
customers and their banking requirements, which are broadly categorized in to four basic
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categories. Its diversified and comprehensive products and services provide universal
banking solutions for all credit and non-credit financial requirement of the customers.
Following chart depicts the offerings of NBP towards its customers:

Individuals can benefit from a large array of our products i.e. Debit cards, safe place to
deposit their savings, government employees can benefit financing against their salary, can
obtain mortgage financing for housing and can benefit from home remittance services to
receive cross border funds. In short NBP have all the product and services for its valued
clients. One thing in which NBP is lacking behind from its peer banks is Credit card,
Employee Payroll and Digitization of its products i.e. Internet banking and online form
submission for cards and loans.

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I need this information from you on Monday as i am working on some research:

1). No. of Branches NBP have

2). No. of Regions NBP have
3). Each Region has how many branches
4). No of Digital Banking users across Regions
5). Category-wise Branches (Category I, II, III)
6). Cost Structure of Each Regions
7). No. of transactions of each Regions
8). No. of Accounts in each Regions
9). No. of ATMs each Region has
10). NBP Internet Banking Users
11). Mobile Phone Banking Users
12). Debit Cards
13). ATMs only Cards

IMPORTANCE OF SOCIAL MEDIA

Social Media became very popular because of its medium that change rapidly and includes
but not limited to social networking sites, social news sites, and microblogging and
networking sites. Furthermore, despite all the negative aspects like privacy issues, hacking,
fake news associated with the use of Internet and Social Media, the world continued to
maximize the benefits related to it.
We Are Social and Hoot suite’s, based at New York, in their latest collection of Global
Digital 2019 report revealed some eye-opening facts with the use of different indicators.
While exploring the Report; following information is derived for our understanding:
1. With 2% growth as compare to past year (↑100 Million) Unique Mobile Users in the
world today are 5.11 Billion.
2. With 9% growth as compare to past year (↑366 Million) Internet Users in the world
today are 4.39 Billion.
3. With world-wide growth by 288 Million (↑ 9%) Social Media Users in the world
today are 3.48 Billion.
a. Out of 3.48 Billion- 3.26 billion people use social media on mobile devices

The growth stated above clearly shows how the new generation is embracing social media
use.

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*Worlds 45% of the total populations are social media users.
It has been observed that the time people spend on social media has increased manifold.
GlobalWebIndex reports validate the fact that average social media-user spend 2 hours and
16 minutes each day on different social media platforms.
The year- 2018 has seen a major rapid development in use of social media in Pakistan. The
social media trends remain popular throughout the 2018 and will remain as a potential
competitive edge in Year- 2019. This has provided businesses with an opportunity to
exercise the power of social media and associate themselves differently on a larger scale.
Hence it is important for organization to create social media content by utilizing the below-
mentioned popular trends and get related benefits like potential for exposure, online
following, and even sales:
1. Videos: Entertainment, Informative, and Live Videos
2. Targeting Ads
3. Social Media Bloggers and Influencers
4. Social Messaging
5. Stories on Instagram

According to mintbrains, in 2017- approximately 5 billion videos were viewed in Pakistan.

People preference of dynamic content over static content have made videos extremely
popular as compare to images. It has been noticed that videos offering entertainment are
being seen in greater quantum followed by informative, one aimed at raising awareness. In
the similar context, few Social Media Websites has introduced the feature of ‘Live Videos’
wherein people go live to record their real-time moments. Businesses use this tool to
broadcast events and other related happenings pertaining to their organizations and is
effective to engage the audience. Similarly, through Targeted Ads, Businesses are targeting
consumer on an individual scale by keeping in view their purchase history and behavior. In
this way, consumers see ads that cater their preferences. Furthermore, Social Media
Bloggers and Influencers rise was seen in Year 2018 which is considered as an effective tool
for Businesses. These bloggers/influencers use creative ways to market business products
and services. Applications like WhatsApp, Instagram and Facebook Messengers have made
people enjoy the instant and free interactions with resolution of their queries quickly without
having to call or email.
Hence it is important for Businesses to use these popular social media tends as Pakistan is
going online rapidly. The statistics related to Pakistan in We Are Social and Hoot suite’s
collection of Global Digital 2019 depicts that:
1. The total population of the country is 202.7 Million
a. ~ 75 Million (37%) of the total population lives in Urban areas
b. ~127 Million (63%) of the total population lives in Rural Areas
c. ~104 Million (51.4%) of the total population is Male
d. ~98.5 Million (48.6%) of the total population is Female
e. Overall Literacy rate is 57% (115.5 Million Population)

2. No. of Mobile Subscribers is 154.3 Million (76% of the total Population)

a. No. of Internet Users is 44.61 Million (29% of the total Mobile Subscribers)
b. No. of Social Media Users is 37 Million (84% of the total Internet Users)
c. No. of Mobile Social Media User is 36 Million

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The report has made a comparison of the mobile Social Media Users on the selected social
media platforms that includes Facebook, Instagram, Twitter, Snapchat and Linkedin.

Hence, it is obvious that more and more users in Pakistan is going online on social media. It
provides a greater opportunity for organizations to utilize these trends to increase their
customer base and sales accordingly.

1.1 RESEARCH OBJECTIVE:

The financial institutions in Pakistan are growing digitally in this competitive environment.
In this research National Bank of Pakistan digital transformation as a case study has been
chosen as being a government-owned entity, it has not focused on changing its traditional
Branch Banking into e-Banking. The purpose of the research is to create an understanding
for the banking professional’s to get an insight about the transformation of banking
operations and its impact on the cost structure of NBP. The research will also highlight the
benefits of social media presence and the role of key drivers responsible for this
transformation.
According to Socialbakers, an international social media analytics company report for the
quarter ending March 31- 2019, it has been observed that the most active business on social
media belonged to retail and consumer goods. The report states the following:
1. Top 5 industries on facebook are Fashion, Services, Ecommerce, FMCG and Beauty
a. Top 5 brands on facebook are Telenor Pakistan, Mangobaz, Al Karim Exclusive,
Limellight
2. Top 5 brands on Twitter are Jazz, Zong, Telenor Pakistan, Samsung Pakistan and
Ufone
a. Fastest growing twitter profiles in Pakistan are Zong, PIA, Careem Pakistan, KE and
State Bank of Pakistan
3. Top 5 brands on Youtube are OPPO Pakistan, Samsung Pakistan, Daraz PK,
Cornetto Pakistan and Zameen.com
a. Fastest growing Youtube profiles in Pakistan are Samsung Pakistan, Telenor
Pakistan, VIVO Pakistan, PEL Pakistan and HBL

It is obvious from the above shared facts that the financial institutions are being growing in
their use of social media. The top five Banks in Pakistan visibility on social media is on a

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very small scale. State Bank of Pakistan, United Bank Limited, Habib Bank Limited, and
Bank Alfalah have their presence on social media and they use it as an important tool of
Marketing and communication strategies.

1.2 RESEARCH QUESTION:

Based on the information embedded in the Research Objectives; the following research
questions will be answered:
 How much NBP can save its cost if its consumer products are transformed digitally?
 How many NBP branches can be close down if product availability on internet is
assured?
 What will be the transformation acceptability across Pakistan? Will it be uniformed
or depends on geographic location?
 How come NBP presence on social media can help it in creating a better image in
the society as the *The Nations Bank*?
 What are the key drivers of transforming traditional Branch Banking into e-Banking?

1.3 PROBLEM STATEMENT:

In this era of globalization, digital media has created increased opportunities for all
organizations. Many Financial Institutions globally claim digital media as the latest and
most cost-effective way to promote business. Likewise, in Pakistan, organizations engage
digital media as an appropriate tool of its overall strategies. Thus it is generally accepted
world-wide that digital media can be a great tool for Banks if there is proper SOPs and
oversight. Through this research, a comprehensive analysis is done to find out how come
transformation of banking operations can impact the cost structure of NBP and what the
associated benefits of it are.

Impact on cost
Structure

Existence on
e-Banking
social media

Acceptability of
e-Banking

It is important for NBP to have a digital media presence, as the later has made the world a
global village by drawing closer the businesses and their stakeholders. Today, information
and data can be transferred from one place to another in a matter of a few seconds. Thus, it
is the core duty of financial firms to utilize digital media as a tool to improve their quality of
products and services for customers, keep themselves up to date regarding market trends and
their competition as well as to retain a competitive edge over their competitors.
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 Chapter 2: Literature Review
Reference materials for studies over impact of digital presence and online banking on the
organizations, including Financial and Non-Financial has been provided by recent studies,
particularly in the field of Finance, Management and Marketing. Over the past few decades,
contribution to this research has been made considering that, digital media as an additional
tool of digital technology has enabled companies to enhance customer engagements. Studies
has proved that world’s half adult population does not have access to their bank accounts
and the related financial services. Pakistan is amongst those countries who are at the lower
end of the spectrum and is not an exception to the fact. The process through which the
availability of basic financial products and services is ensured is termed as financial
inclusion. This includes providing the basic facilities i.e. bank accounts, savings, insurance
and credit faculties. This also plays a vital role in poverty alleviation for the low income and
less privileged household.
According to Cull (2014), financial inclusion helps in boosting the economy and reduction
of the inequality of income. Around 2.5 billion people in the world lack access to the
conventional services of the banks. While in case of Pakistan, according to financial
inclusion survey for 2015, only 7 percent of the total adult population has access to banks in
form of bank accounts. Meanwhile there are very less amount of accounts registered with
other financial services providers. However, it is observed that these figures are improving
gradually with the passage of time. On the other hand, it is a matter of utter disappointment
that if the figures of financial inclusion in Pakistan are compared with those of the other
countries of the region e.g. Sri-Lanka, Nepal, Bhutan, Bangladesh and India, Pakistan has
the lowest percentage among all of them. According to Khan and Rashid (2015), Pakistan
even lacks behind from other countries of the world in sub- Saharan Africa, Caribbean and
even in Latin America. Meanwhile the government and private sector have stepped forward
to remove the barriers between the growth and development of the economy by providing
the basic financial services. The mobile service providers have also initiated the e-banking
platforms to help people transfer funds and help people use the basic banking services.
According to Ghosh (2016) mobile banking services are helping those economies that are
having a weak financial architect and they are not able to perform up to the mark.
According to Hughes (2014) it helps the poor people to access the financial services without
bearing any extra charges and expenses.
Triki (2013) argues that poverty alleviation in developing countries can only be possible via
financial inclusion and mobile banking is one the most important step in this path of
development. Mobile banking enables users to access their accounts, send and receive funds,
payment of utility bills and tuition fee of school, college and university, and even repayment
of loans as well (Rashid, 2015). Mobile banking enables the users to use the banking
services without physically going to the bank (Mishra, 2013). For instance, in Kenya, the
famous M-Pesa mobile phone application has helped the users to pay bills, make purchases
and payments could be done from their mobile phones, send and receive bills and even make
payments for the health facilities used at hospital (Johnson, 2014). According to Siddik et al.
(2014) mobile banking is an alternative to traditional banking and the formal services by the
banks. According to Donner (2010) the cost incurred by banks for branches and the
conventional banking services are more as compared to mobile phone banking. Also, the
money generated from mobile banking and the growth of the economy are clear indication
of the employment creation in the economy. This helps in better growth of the financial
industry as well as the better functioning of the financial markets and ultimately it shows

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how efficiently financial inclusion is performing in an economy.
Andrianaivo (2012) stated that mobile money helps in catalyzing the process of financial
inclusion also serves those clients who do not have formal bank accounts in conventional
banks. In this way the gap between the financial structure and in the developing economies
is overcome by mobile phone banking since the formal banking has various costs associated
with it which are not there in mobile phone banking. There is proper monitoring of the data
of the clients, data regarding deposits and credit allocation and the financial services
provided to the customers are kept in the record properly (Triki, 2013).
According to Khan and Rashid (2015) mobile phone banking unlocks opportunities by
access to the market and services for those customers who have low-income resources. Their
inclusion in the financial setup helps in the poverty alleviation by enabling them to invest
large sums of money by acquiring loans in their businesses, for education and training
purposes as well as for asset creation as well. This also helps in the management of expenses
and assets, improves income and the vulnerability of unforeseen events such as theft,
accidents and illness etc. is also reduced. Chibba (2009) suggested that mobile banking
would help in achieving one of the major goals of the millennium development goals of
poverty alleviation. Ghosh (2016) found that in India, the mobile phone banking facilities
helped in the development of the rural areas of the country in the form of better services for
disbursement of loans and thus it directly creates an impact in the form of growth of
financial sector in those areas. It also helps in reduction of information asymmetry in the
rural areas specially among the farmers and helps improving their bargaining power. Terlit
(2011) stated that mobile banking helps in the development of the economy by helping
women to be the part of economy. Access to financial accounts for women helps them to
invest their money on the education, health and other expenses of their household thus
enabling them to not only develop their own wellbeing but also increases the productivity as
well. Rashid (2015) argues that mobile phone banking helps in increasing the convince in
using financial services, by reducing the costs and increasing the range of the financial
services that are provided to the customers. This helps in boosting the capacity of banks to
grant loans to the deserving entrepreneurs, cottage industry workers and small and medium
enterprises. This also helps the government to increase their revenues from taxes and reduce
the leakage of money from their resources.
Gencer (2011) suggested that mobile phone banking would help a lot the developing
economies to increase their GDP and per capita income. The costs of transferring money via
mobile banking is less therefore more remittances are made, this helps in increasing the total
investments and savings as well. Increase in GDP will also help in rising the productivity of
the governments and the businesses by using the digital payment methods. According to
Rashid (2015) for businesses mobile phone banking provides an excellent opportunity to
provide better services to their customers and increase their profits by targeting new
markets.
Overall, increasing access to finance via mobile phone banking would increase the financial
inclusion but also it will reduce poverty by increasing investments and productivity via
empowering women and help the institutions to get strengthen by promoting transparency.
2.1 MODERN WEB-BASED TECHNOLOGIES
Social media networks can be termed as virtual places where an individual can visit in their
leisure time and get entertainment. Hanafizadeh & Khodabakhshi, (2010) the practitioners as
well as the academics have admitted that the role of modern web-based technologies has a
huge supporting impact on overall firm’s affairs. Accordingly, a new popular web based

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technology in modern era is social media. Palmer & Koenig-Lewis, (2009) researched that
all the Blogs, social networks, content communities, Forums, content aggregators are
included in social media which is also known as web 2.0. All these are aim to facilitate
collaborations and sharing of information via interactions. Faller and Schmit (2013) views
social media as a conversation instrument around the media while Brunty and Helenek,
(2014) and Gould (2015) consider it as a tool for interaction that allows users to share
contents. Alber Ramos Henas (2008) deliberated that Social Media being part of Information
and communication technologies has resulted in changing market dynamics by forcing the
firms to be competitive (Porter 2011) and consumers to be more powerful (Urban 2005) by
giving them tools for accessing before opting for goods and services. As per Thomas 2007,
social media has created new challenges and difficult choices for marketing strategy and
tactics. Kaplan and Haevlein (2010) recognized that Social media has resulted in creation of
real time data for improving interactions and collaboration between participants. The
research work was in line with the work of Chan & Guillet (2011) and Mangold and Faulds
(2009) that the users bring their own unique set of point of view through blogs, networking
sites and virtual world etc. Boyd & Ellison conducted a research in 2007, which concluded
that people do want to share the content and maintain relationships on social networking
sites with a specific friends list or group of people but them more eager to maintain the old
relationships rather than making new ones. As discussed social media sites can be fun to use
and can be good recreational activity but finding ways to link these sites in helping business
in a particular way is yet to be discovered. Social Networking Sites’s are considered to be
source of networking for companies and are depicted to link the organizational strategic
values with the firm’s overall performance. All the recent statistics show that more and more
people are using social media. It is evident from the study of Zarrella & Zarrella (2011), if
we think Facebook as a country, its users would make the 3rd biggest country of the world
after China and India.
2.4 SOCIAL MEDIA AND FINANCIAL INDUSTRY
Khulekani Yakobi and Bethuel Sibongiseni Ngcamu (2016) conducted an exploratory study
on the impact of social media of selected commercial banks that summarize the fact that the
Financial Institutions needs to discover the power that comes with active presence on Social
Media. According to their research, Social media plays an important role in Team
collaboration, communication with people resulting in higher productivity. Owing to
widespread availability of wifi and 4g, the social media has resulted in having a huge social
influence owing to creating internet phenomena. The active users on social media, their
respective line of thought and interrelated groups helps in creating a vast range of Data that
requires to be utilized in real time basis for increasing ones market share in local and global
markets. The availability of online digital technologies and social media usage helps in
creating a viable platform for uncovering new opportunities and finding out of the box
solutions for business problem.
K.S. Venkateswara Kumara, Dr. V. Rama Devib (2014) during Symbiosis Institute of
Management Studies Annual Research Conference (SIMSARC13) presented their study on
Social Media in Financial Services– A Theoretical Perspective with respect to its
development in India. According to their study, the number of social media users is
increasing like wildfire in India these days. The undiscovered social media market for
financial firms in India can play a vital role in getting involved more and more into different
segments of customers and thus devising strategies that are aligned with the current market
trends and demands. The modern-day technology, high-speed internet, high functioning
computer systems and above all artificial intelligence can be used by financial firms to

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develop and integrate policies for not only external customers but also their internal
customers i.e. employees as well. The study established that Social media has made the
world a global village by drawing closer the businesses and their stakeholders. Today,
information and data can be transferred from one place to another in a matter of a few
seconds. In such conditions where there are too many platforms and transfer of information
has become so volatile, one can easily be misguided by a piece of false news that may be
floated on social just for the sake of competition or by any dissatisfied chunk of customers.
This can have an immense impact on the performance and goodwill of a firm and to be more
precise, the financial sector would be worse off in these circumstances. In India, social
media is a huge and untapped market for financial firms, which would be beneficial for
both; organization and the clients as well. It is the core duty of financial firms to utilize
social media as a tool to improve their quality of products and services for customers, keep
themselves up to date regarding market trends and their competition as well as to retain a
competitive edge over their competitors.
A research article by Onkar Shivraj Swami, B. Nethaji, Jyoti Prakash Sharma (2018) on
Facebook Adoption in Indian Banks: An Empirical Investigation identified certain elements
among Indian Banks for adoption of social media. The research established that Public
Sector Banks are hesitant to have their existence on Social Media as compare to Private
Banks. Similarly, Banks with Medium/Small Balance Sheets are most likely to be present on
social media channels as compare to giants. Sangita Mehta in her column for The Economic
Times (2018) pointed that customer complaints/queries on social media were responded
actively by HDFC Bank Limited and State Bank of India after analyzing the data of 09
Banks having presence on Twitter and Facebook. An article series ‘The Social Banker’ was
launched by KPMG International in 2011 aimed at determining the impact of social media
on Banking. According to KPMG, social media is building the relationship between
customers and Banks by offering a highly valuable customer channel. Hence, in order to
utilize the potential impact of social media in terms of insights about customers’ demands
and market trends, Banks should devise their policies accordingly. Pakistan & Gulf
Economist in their article of August 2014 discussed that social media is a cost-effective tool
for Banks to get new customers. For Banking Services, an example from India was quoted
wherein ICICI Bank was acknowledged to be the first bank to use social media as a
platform.

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 Chapter 3: Research Methodology
The study will be conducted to find out the impact of digital transformation of traditional
banking operations on the overall cost structure of NBP. It will also discuss the benefits of
social media presence and the role of key drivers responsible for this transformation. The
research will provide economists and financial analysts with an additional tool of digital
technology for Financial Institutions enabling them to enhance customer engagements and to
be market competitive. It will also be an opportunity for the organizations to invest
considerably in user-friendly platforms in advance to achieve first-mover advantage. Hence
in order to answer these research goals, the researcher will opt to obtain the view of the
customers dispersed across Pakistan in the following manner.

37- Regions

5- Provinces

Top-1 Region Bottom-1 Region

(Based on performance) (Based on performance)

A total of 10 regions will be examined based on their financial performance for the year
2018. 100 questionnaires will be distributed amongst each regions which will be further
placed at our Branches. All the data collected from the research instrument will then be
worked out for interpretation. Besides with primary data, secondary data will also be used in
the form of literatures, books and published articles to support the survey and its results.

3.1 RESEARCH DESIGN

For conducting the study, descriptive mode of research will be used. The purpose of
descriptive research will be to substantiate the impact of digital transformation of traditional
banking operations on the overall cost structure of NBP. The study will use descriptive
approach to get first hand data from the NBP customers and the senior management of the
organization.

3.2 SAMPLE SIZE

A total of 1000 questionnaires will be shared with the customers on pan-Pakistan basis to
assess their opinion about acceptability of e-Banking services as part of transforming
traditional banking services. The form will be placed in Hard Copies at Branches where the
customer usually visit. The sample size will be selected to ensure that the respondents are
closely and directly related to the issue raised, making the questionnaire items easy for them,
which will make them comfortable in completing it.
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3.3 SAMPLING TECHNIQUE
The sampling technique that will be used is intended to provide opportunity to respondents
from all walks of life dispersed on geographic basis and are the customers of the Bank. The
form will be placed electronically and also will be provided in hard copies at Branches
where the customer usually visit. For this purpose Stratified Sampling technique will be
adopted. It will not only reduce the sampling error but will also help in creating a better
result.

3.4 RESEARCH INSTRUMENT

The questionnaire will be used as an instrument in the research. The survey questionnaire
will be distributed into key sections. A preliminary information about the education,
frequency of visit at NBP Branch and possession of Bank account in any other Branch will
be obtained.
The questions will be structured on Likert format in which 5 choices will be given to the
respondents for every statement. The choices will basically identify the degree of agreement
or disagreement for each respondent in the given statement. The following scale will be used
to take the total responses that respondents have given for each survey question by
calculating the weighted mean:

Range Interpretation

5.00 Strongly Agree

4.00 Agree

3.00 Sometime’s Agree

2.00 Disagree

1.00 Strongly Disagree

Likert survey is selected as the questionnaire type because this will allow the respondents to
give answers easily. Besides that, this instrument will allow to take out the quantitative tactic
effectively with the practice of statistics for the data interpretation.
3.5 PRIMARY AND SECONDARY RESEARCH
For this study both quantitative and qualitative forms of data will be collected which
includes the primary data and secondary data. The primary data will be collected from the
responses of the respondents given during the investigation process. The secondary data will
be obtained from literatures and published documents that are related to the topic.

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Page | 25
 Chapter 4: Results & Analysis

4.1 OVERVIEW OF INTERVIEWS:

The interviews were conducted separately with the Business Groups and Support Group for
whom the Hiring is done on yearly basis to assess the following:
I. The satisfaction in terms of Hiring the individuals through advertisement
II. Feedback on customer service obtained via Social Media (if any)
The interviews were conducted with the following:
I. Syed Jamal Baquar, SEVP/Group Chief- Corporate Banking Group
II. Usman Shahid, SEVP/Group Chief- Credit Management Group
III. Syed Hasan Irtiza Kazmi, EVP/Head- Regional Corporate Center
In a recent discussion with Mr. Syed Jamal Baquar and Mr. Usman Shahid; they raised their
concern regarding the hiring approach being practiced and how social media presence of
NBP can help in curbing the situation. They are of the view that at NBP, the practiced
approach is no longer effective and is quite orthodox. With time, everything has evolved and
it’s a digital age now but the hiring process at our organization is the same as of the 90’s
with no evolution in it. We are bound by the Service Rules and the Policies at NBP due to
which we usually don’t get good people on board. It’s a market norm that you hunt for the
good people who adds value to your strength and creates a healthy competition within a
team. But due to same old conventional hiring processes we are unable to find good people.
Hence we keep on building the capacity of the existing staff. We have some of the best
platforms available at our disposal that can be utilized to get the right candidate in a most
efficient manner but still, we consume time in sorting the applicants, skills test, reference
check, personality or IQ tests, extensive interviews and make this overall process tedious.
The bigger problem is that we don’t know that all this produces some satisfactory hires or
not. No one can guarantee that. And no one monitors cost or time consumed per hire. Maybe
that’s the reason it's being practiced; no one keeps a track on how unfavorable it has
become. We can post our Hiring requirement on LinkedIn; we can poach people from other
Banks; the way private banks do. But for this to happen we need to have the support of
senior management.
Mr. Syed Hasan Irtiza Kazmi agreeing with the Mr. Syed Jamal Baquar and Mr. Usman
Shahid commented that in technological times when everybody almost has access to the
internet and it’s the first solution for everything, it’s high time we realize the importance of
social media presence. People are becoming service oriented and customer care really
decides the goodwill of an organization, and no one wants to be with an institute that takes
ages to reply on social media platform or doesn’t have updated information on it to keep the
interested people informed. People today take is as a sign of arrogance or lacking resource
which is not how we want to be seen. Complaints or queries should be dealt with in time to
create a softer, welcoming image in the corporate world. Doing things late is like doing it
wrong. Telecom and Food Industry unlike Banking and Financial Institutions across
Pakistan are aware of the electronic and social media thus they are most active on social
media websites for launching new products and services and for attention gaining of the
customers. This increases the value creation and increases higher customer expectations for
personalization and positive social care.

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4.2 OVERVIEW OF FOCUS GROUP:
A focus group discussion was conducted in April- 2019 wherein following professionals
from the industry participated:
I. P1 from Digital Marketing Industry
II. P2 from Digital Marketing Industry
III. P3 from Journalism Industry
IV. P4 from Financial Institution
The Focus Group Discussion theme revolved around the following three questions:
 How Social Media presence of NBP will help in marketing of the Products and
services
 How Social Media presence of NBP can have a positive impact on NBP Brand
Image;
 How NBP can improve its customer service
P1 started off the discussion with a claim that in this era of globalization, social media has
created increased opportunities for all organizations. She is of the view that many Financial
Institutions globally claim social media as the latest and most cost-effective way to promote
business. NBP in today’s era should base its Social Media presence on two things; first
promoting awareness of its brand and then concentrating on Solutions to the problems. P2
shared the statistics of ‘We Are Social’ according to which out of the 154.3 Million Mobile
subscribers in Pakistan; 44.61 Million people use Internet and 37 Million people of the total
population use Social Media. This means that 18% of the total population is using Social
Media and this number is increasing significantly. Banks across the globe are working on
Digital Banking and social media is one of the tool where they apart from the marketing of
the products; they can also work on exploring the solution to the problems faced by the end-
user.
P4 shared his recent experience about the launch of its NBP EMV Debit Card & Mobile
Application while utilizing the platform of Facebook and YouTube. According to him, the
result of the campaign was appreciated at the senior management level in terms of
impression, video views, clicks and YouTube subscribers. The only issue at NBP is lack of
ownership and policies in terms of its social media policy. P3 stated that Millennial are tech
savvy with a greater ability to save their time and energy in terms of visiting the Banks for
petty issues. They believe in effective communication and respond frequently with the
feedback about the products and services on the platform available. They will certainly be
inclined towards the Financial Institutions that will provide them with the one-window shop;
hence making them the strongest player in the society. The existence on Social Media will
help NBP to determine the new trends and evolve a better mechanism for customer service.
P1 endorsed the concept of P3 and further deliberated that Social Media being part of
Information and communication technologies has resulted in changing market dynamics by
forcing the firms to be competitive and consumers to be more powerful by giving them tools
for accessing before opting for goods and services. P3 continued that Millennial are fun
loving by nature and as social media sites are fun to use and is a good recreational activity it
is important for organizations to link their objectives of social media existence with the
overall goal.
P4 commented that over the years, NBP has redefined its role into a modern growth-oriented
commercial Bank by expanding its business network across continents and by capturing

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large market share in the debt equity market, corporate investment banking, retail and
consumer banking, agricultural financing and treasury services in Pakistan. Hence just the
way other Banks are operating on social media; it is the right time for NBP to have its
presence on social media. P2 further stated on the existing practices of other Financial
Institutions that the undiscovered social media market for financial firms can play a vital
role in getting involved more and more into different segments of customers and thus
devising strategies that are aligned with the current market trends and demands. The
modern-day technology, high-speed internet, high functioning computer systems and above
all artificial intelligence can be used by financial firms to develop and integrate policies for
not only external customers but also their internal customers i.e. employees as well. P4
continued with the thought of P2 that the organizations can develop a mechanism to assess
the nature of questions asked at its social media platform. This will in return help us to
develop the marketing campaigns by incorporating the loop holes defined by the end-user.
The discussion concluded on the fact that NBP operates with the network of 1498 Domestic
Branches, 21 Foreign Branches, 08 Local & International Subsidiaries and Joint Ventures
and provides commercial banking services including corporate loans, investment banking,
advisory, forex, global remittances, underwriting, asset management, agency services,
brokerage, leasing, Modarba and such other banking & financial services. It’s a one-window
shops for the Government, Consumers and Corporate and believes in promoting financial
inclusion of the unbanked masses in the country, creating equal employment opportunities
and delivering its responsibilities as a good corporate citizen. There are few Banks that have
very limited visibility on social media. In Pakistan, there are private Banks that are not only
engaging customers via bridging online social networks but it also helps them in boosting
brand visibility. Therefore, NBP should also benefit from these privileges by having its
presence on social media network.
4.3 OVERVIEW OF DISCUSSION ON QUESTIONNAIRE:
The focus group discussion evaluated the potential of the topic. The objectives and direction
of the research was set accordingly. I got feedback from the following two members of the
Focus Group Discussion who helped me in developing the questionnaire:
I. P1 from Digital Marketing Industry
II. P3 from Journalism Industry
The purpose of the research is to substantiate the impact of social media existence for
Financial Institutions in terms of its Image, Marketing of the Products, and Improvement in
customer service on pan-Pakistan basis and to hire individuals through LinkedIn, hence,
descriptive mode of research was endorsed during the Focus Group Discussion. As primary
source of information is our customers who visits our branches on daily basis and are closely
and directly related to the issue raised; the questionnaire was developed accordingly.
The questionnaire is split up into 4 parts.
 First to get information about the demographics
 Second to get information about the Social Media Usage of the customer and the
frequency with which he visits our NBP Branch.
 Third to assess their opinion about NBP services
 Fourthly to gather information about NBP Grievance Redressal and where they will
rate NBP as a Bank
The questions will be structured on Likert format in which 5 choices will be given to the
respondents for every statement. The choices will basically identify the degree of agreement
or disagreement for each respondent in the given statement. This instrument will allow us to
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take out the quantitative tactic effectively with the practice of statistics for the data
interpretation. The questionnaire sequence will first help us in assessing the demographic
credentials of the individual and to know about his presence on tools of Social Media. The
statistics related to Pakistan in We Are Social and Hoot suite’s collection of Global Digital
2019 depicts that out of 37 Million Pakistani, approximately 36 Million are Facebook Users,
and 6.30 Million are Snapchat Users, 1.26 Million Twitter Users and around 5.10 Million
people on LinkedIn. We will be able to compare our sample results with the Global Digital
2019 report. The questionnaire will also help us to get insights about the knowledge of
social media platforms. It will also provide a picture a picture about the intent of the
customer in supporting NBP presence on social media.
4.4 QUESTIONNAIRE:

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 QUESTIONAIRE

I am a student of MBA at Institute of Business Administration- Karachi and I am conducting a research

on the ‘Impact of Social Media Existence on the Brand Image of NBP’. I am looking forward to search for
the following:

I. How come NBP presence on social media can help it in creating a better image in the society as
the *The Nations Bank*?
II. How well social media campaign aid to the marketing of the NBP products & services?
III. Will feedback of consumers on social media help NBP to improve its customer service?

I will be thankful if you cooperate in filling this questionnaire honestly and objectively. All information
will be kept confidential and will only be used for research and analysis purpose:

GENDER
◌ Male
◌ Female

EDUCATION
◌ Matriculation
◌ Intermediate
◌ Bachelors
◌ Masters

AGE
◌ 21 - 30
◌ 31- 40
◌ 41-50
◌ Above 50

Do you have a social media account? (Click where applicable)

◌ Facebook
◌ Instagram
◌ Twitter
◌ Youtube

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 Very Frequently

To some Extent
Frequently

Rarely

Never
 SOCIAL MEDIA USAGE
 VISIT TO NBP BRANCH
GENERAL INFORMATION

1 How frequently do you use Facebook

2 How frequently do you use Instagram

3 How frequently do you use Twitter

How much time do you spend using Social Media Mobile

4 Applications?

Have you followed facebook, Instagram and twitter pages of other

5 industries? Like News Channels, Banks, Fashion Outlets

Have you ever complaint about any Product or Service pertaining to

6 any organization online on social media pages?

7 How frequently do you visit NBP Branch and Head Office?

Sometimes

Disagree

Disagree
Strongly

Strongly
Agree

Agree

Agree
 Customers Opinion
INFORMATION ABOUT NBP

1 I am satisfied with the ambience of the Banks premises I visited

2 I am satisfied with the services of the Bank Staff

I will follow the NBP page on Facebook, Instagram and Youtube (if
3 there is any)

I have higher expectation from NBP to go digital so that I can look

4 after my transactions while sitting at home

I have randomly seen NBP Products advertisement on the social

5 media

I usually see the advertisement of the Products/Services on the social

6 media

Have you ever lodged a complaint against any services of the Bank?
◌ Yes
◌ No

If you are given an option to complete any of the transaction while seated at home on your cell
phone/laptop/desktop. Will you do?
◌ Yes
◌ No

Have you ever visited the NBP Website?

◌ Yes
◌ No

Do you have Bank Account other than NBP?

◌ Yes
◌ No

Where you will rate NBP in terms of better Service provisioning?

(Priority Bank = 1; Alternative Bank = 2; Least Priority = 3)
____ NBP
____ Other Bank- I ___________
____ Other Bank- II ___________

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Chapter 5: Conclusion & Recommendations

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 Appendices

Transcript of Interviews

Transcript of Focus group

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