The Philippines is now the top market for financing technology (fintech) with more digital transactions taking place since the pandemic two years ago. But more needs to be done like reducing red tapes in licensing and less bureaucracy or ease of doing business must be improved.
From being a laggard in digitalization, the Philippines is now recognized as the top market of digital financing technology (fintech) in Asia, a report of Alibaba Group’s affiliate said.
Liqi Peng, Ant Group’s head for North America Business & Global Strategic Partnership, said this in a webinar Thursday given the case of the country’s leading mobile wallet provider, GCash, reported Business Mirror.
“We are one of the largest investors of GCash,” she told reporters during John Clements’ webinar dubbed, “Dance and Thrive in the New Fintech Business Landscape” on Thursday.
“GCash is the wallet that makes Ant Group the proudest, and why is this so? We can see their consumer data, with a pent up on their monthly active users. We can see the adaption of [it also by] business users in terms of digital payments. We have to say that the Philippines is one of the top countries in whole Asia [in the fintech space at present].”
Agreeing with her, Union Bank of the Philippines (UnionBank) Executive Vice President and Chief Human Resources Officer Michelle Rubio said that a lot of fintech enterprises have sprouted nationwide due to the rise of the contactless economy since the Covid-19 crisis hit the country in the last couple of years.
“We used to like cash so much, and suddenly because of the pandemic, we needed an alternative that could actually allow us to transact or even do commerce in a seamless fashion. So I think we have a lot of players who are actually experimenting and looking at pain points of consumers and trying to create what’s the next super app,” she noted.
Compartmentalized no more
What used to be a very compartmentalized banking system has somehow been cracked by the fintech system via the open banking and application programming interfaces (APIs).
“Nowadays, I’m proud that the Philippine banks have been the most aggressive in terms of opening up their networks via open banking and APIs,” according to Ayannah Founder and Chief Executive Officer (CEO) Miguel Perez.
He said that in the past 18 or 24 months, the Bangko Sentral ng Pilipinas has issued at least six digital banking license for what he called the “greenfields” or brand-new digital banks, which are opening up in the next two quarters.
“So from a country that is sort of a laggard in terms of digital transformation, we’re suddenly at the forefront of digital transformation, and that is actually being led by financial technology,” he said.
For more Filipinos to really embrace fintech, Perez advised more enterprises, particularly e-commerce players, to adopt solutions in accepting payments.
He said that it’s very important for payment providers like GCash and others to get onboard the small merchants, comprising 60 percent of domestic retailers that do general trade like the mom-and-pop shops and roadside stores.
“That is the challenge. But once that problem is solved, or at least cracked, then at least the adoption rate will accelerate further,” he reiterated.
To enable Filipino consumers to overcome their “love for cash” and embrace fintech, Peng suggested businesses to strive for technology and product innovations.
Interconnectivity through improved telco infrastructure is also important to heighten the fintech adoption in the country, Rubio recommended.
“[What’s more], to create products or services that the public could trust,” she added. “As producers and service providers, we must ensure that we are actually ensuring safe transactions.”
Reduce licensing red tapes
On the regulatory side, Perez pointed out that red tape, like in terms of licensing, must be addressed so that more fintech players to join the fray.
“We’re getting there but, I think, bureaucracy or ease of doing business has to be improved,” he said, while citing the need for more partnerships with the private sector like the banks and payment solutions firms. “It’s an exciting time, particularly for financial services providers like the Unionbank, BPI [Bank of the Philippine Islands], BDO [Banco de Oro], and others, that they should really ride this way.”
Tags: #fintech, #Phlistopmarketforfintech, #financing, #pandemic