By Abdul Ghani

Pakistan’s banking sector generated a revenue of Rs18.7 billion from customers for SMS alerts during 2025, reflecting the growing reliance on real-time transaction updates and enhanced financial security services, according to a document available with Wealth Pakistan.

Operating under the regulatory framework of the State Bank of Pakistan (SBP), the banks are required to ensure timely communication with customers regarding their financial activities. These SMS alerts cover a wide range of services, including debit and credit transactions, password changes, login attempts from new devices, and updates to account settings, helping customers stay informed and protected against fraud.

Despite generating Rs18.7 billion in revenue, the banking sector incurred significantly higher costs of Rs25.6 billion to provide these services. This expenditure was driven by the massive scale of communication, with over 11.4 billion SMS alerts sent during the year, excluding marketing messages. The average industry cost per SMS, including taxes, stood at approximately Rs4.2, contributing to the overall financial burden on banks.

Pakistan’s banking system currently comprises around 243 million accounts, although many individuals hold multiple accounts. Notably, only about 7% of these accounts are charged for SMS alert services, indicating that the majority of customers either receive alerts free of cost or at subsidized rates. This approach highlights the sector’s commitment to financial inclusion and customer facilitation.

The document further notes that approximately 18 million accounts are subscribed to paid SMS alert services, particularly for over-the-counter or in-branch transactions. This growing subscription base reflects increasing customer awareness and demand for enhanced security features.

To handle the large volume of messages efficiently, banks employ a mix of delivery channels, including third-party SMS aggregators, direct connectivity with telecom operators, and hybrid systems that combine both methods. These mechanisms ensure the timely and reliable delivery of alerts nationwide.

While digital banking channels such as mobile applications and email notifications are gradually gaining traction, SMS remains a vital communication tool, especially for customers with limited access to smartphones or stable internet connections.

Credit: INP-WealthPk