WITH the increasing shift to digital, the financial technology (fintech) sector is tasked with upgrading offering to meet the surge in demand for online banking services, a fintech executive said.
“The challenge is for us and many other fintechs to meet the growing demand of the customer base and to match them with the right products,” First Circle Growth Finance Corp. Managing Director Moritz Gastl told the BusinessMirror.
The lockdown measures imposed amid the coronavirus pandemic has forced the public to turn to digital banking, opening accounts online. Among the financial services these fintech applications are offering include savings, cash withdrawal, money transfer and even lending.
“Covid has significantly accelerated the digital service adoption in the Philippines,” Gastl said. “People that could not imagine to start a loan application online a few months ago are now processing all their banking services through online banking.”
While there is demand, Gastl pointed out that the “lack of a national ID system” is hindering the growth of fintech adoption.
Last month, Malacañang announced that additional 20 million individuals are eyed to be registered to the Philippine Identification System by the end of this year. This is in addition to the 50-million target registration.
President Duterte and Cabinet members also approved the allocation of additional P3.52 billion for the said initiative.
“The cost of identifying individuals and ultimately being able to lend to them is extremely high and it needs to come down in order to lower the hurdles for customers to engage with fintech services,” Gastl said.
For the part of FintechAlliance.ph, it vowed to participate in promoting the digitalization of financial services in the country to aid economy recovery.
“Fintech Alliance is ready to help in getting back our economy on its feet again,” Angelito M. Villanueva, the group’s chairman said in its year-end report.
“Collectively, the Alliance is committed to accelerate the realization of a digital economy amidst the pandemic,” he added.
Last year, the fintech group welcomed 14 new members. These include: libaba Cloud (Singapore) Pvt Ltd; Brankas Digital Technologies Inc.; Cashwagon (Green Money Tree Lending Corp.); Cebuana Lhuillier (PJ Lhuillier Inc.); Gorriceta Africa Cauton & Saavedra; Micro-D International Inc.; MoneyGuru (MoneyMax); Netbank (Community Rural Bank of Romblon); PayMongo Philippines Inc.; WeFund Lending Corp.; Salesforce; and, Xendit Philippines Inc.
The FintechAlliance.ph recently welcomed the approval of the digital bank licensing regulations by the Bangko Sentral ng Pilipinas (BSP).
“Coupled with the recently released draft on the guidelines on open finance framework and a comprehensive digital payments transformation roadmap, the Philippines is poised as an emerging digital hub in the Asia Pacific region,” Villanueva said.
The digital banking framework, the group said, came at a time when more foreign fintech players and conventional banks are beefing up their online offering.
According to the Philippines Fintech Report 2020, there are currently over 190 fintech players in the country, mostly offering services in lending, payments, digital wallets, and remittances.