AS digital banking slowly gains its foothold in the country, Voyager Innovations, the digital-services arm of Smart Communications Inc., intends to tap more financial institutions into the financial-technology (fintech) bandwagon to promote financial inclusion in a mobile phone-heavy society.
Dindo Marzan, Voyager managing director and head of Voyager Business, told the BusinessMirror on the side of a technology conference that banks have opened up to the prospect of infusing the traditional brick-and-mortar banking solutions with faster, more efficient technologies.
“CFOs [chief financial officers] are open toward the shift of traditional banking to mobile and digital banking. They’re very much open compared to last year and they’re being disrupted now,” he said. “[They are] able to maintain the traditional business while being ready for the next wave.”
Most of the company’s major developments have stemmed from their top product, PayMaya (formerly Smart eMoney), which now ranks as the leading over-the-top digital payments app in the Philippine market. The platform is expected to rake in P200 billion worth of transactions at the end of the year.
“Since we have PayMaya, we want to influence the banks to go into the open economy and see the things we do. It’s not only about payments. We’re actually completing the whole customer experience,” he said.
The company is planning to tap into more banks before the year ends. China Bank Savings, Philippine National Bank Savings (PNB Savings), Land Bank of the Philippines (LandBank) and Union Bank of the Philippines (UnionBank) are among the first to jump into the digital platform, Voyager head for communications Nick Wilwayco said.
Voyager has also set up a partnership with life-insurance provider Sun Life in February of this year.
Based on Voyager data, most of the banks have already set up for the digital marketplace Lendr, which allows 24/7 application of loans online instead of clients physically transacting banking establishments.
Others have tapped Voyager to be the service provider for the digital and mobile platforms of selected programs.
“In line with the fintech thrust of Voyager, we are also looking at other platforms to enable the consumer, one of which is Lendr. Basically, anyone who wants to avail themselves of the loan, any loan. We know that these can fuel financial inclusion,” Marzan said.
At present, the digital service provider is in the process of integrating digital solutions in the rural banking system, as the company has partnered with the Rural Bankers Association of the Philippines, while looking closely at the ecosystems of the banks to ensure the bank has the capacity to cater to the influx of applications expected to flow in from the digital market.
“You also have to consider the banks if they’re ready to move at such an online platform. They’re fond of it but they’re the receiving end, so they may submit an application for Lendr but they may not be ready to process all the applications that they receive,” he said.
Marzan said Voyager is expecting fintechs to surge further by the following year, alongside the growth of mobile-phone users in the country.
“My forecast is by next year this is going to be big, mainly because of the mobile phones,” he said.
The executive said amid cybersecurity threats, along with money-laundering and fraudulent crimes, Voyager remains confident of the security of their system as their products undergo several audits, both locally and internationally to adhere to the standards or regulators and private institutions.
Marzan’s forecast goes in line with a previous report by the BusinessMirror. General Manager for Asia Pacific at ASG Solutions Software Praveen Kumar predicted the likelihood of the Philippines’s skipping altogether the stage of the massive consumer usage of credit cards and transactions happening through the mobile phone is high.
“The users now skip using the computers and they skip directly to mobile phones. All the convenience happens on your mobile phone. Now, people would rather stay at home and order everything online. It’s a lifestyle change eh. And fintechs is one reason that enabled the digital lifestyle change,” Marzan said.
Bangko Sentral ng Pilipinas official Jay M. Dizon has expressed positive notions toward the growth of electronic payments through mobile devices in a previous statement.
“I think there will be tremendous growth, particularly in mobile-payments. Given the financial technologies that are emerging right now, [there should be more] mobile banking applications later on and faster e-payments [technologies] will be more efficient,” the head of the Office of the Supervisory Policy Development said.
Global auditing firm KPMG and CB Insights said a total of $5.7 billion was invested in fintech in the first quarter of 2016 in Asia, with investments in Southeast Asia increasing significantly, as well. In the past 18 months, Southeast Asian fintech start-ups took a combined $345 million of funding.
The Philippines is still behind its Asian neighbors in fintech developments. In the past year, China has been the leading investor for fintechs across Asia. Countries, like Singapore, Hong Kong and Australia, have already set up fintech hubs, and Japan has already expressed support for the growing sector.
The United States Agency for International Development Philippines Household Survey on Payments 2015 showed only 19 percent, or 12.3 million Filipinos, have adopted to the electronic-transaction method of making purchases, reflecting the low usage of e-payments in the Philippines.