Source: https://www.bworldonline.com/technology/2022/08/04/465816/ai-to-boost-phl-fintech-industry/
ARTIFICIAL INTELLIGENCE (AI) and efficient data management in business operations will boost the Philippine financial technology (fintech) industry, according to AI-powered platform Provenir.
“The pandemic and its restrictions caused a huge generational spike in the eruption of digital services and has demanded that businesses adapt themselves at a very high speed,” said Provenir General Manager for Asia-Pacific Bharath Vellore.
Firms and institutions are now expected to offer financial services that would generate alternative revenue streams and improve the customer experience amid the pandemic, he said.
In a forum titled “Fintech: A people’s revolution in the Philippines,” Mr. Vellore said the future of financial technology lies in the ability of businesses to harness the potential of data.
“AI in fintech opens the doors for the digitalization of credit-rich verticals and diversifies products and capabilities. Agility and speed in personalization play critical roles in providing personalized offers to customers, aiding in hypergrowth,” Mr. Vellore said.
Fintech is not limited to digital banks and neobanks. The industry also includes embedded and open financial services that are on the rise.
“With so much innovation happening in the fintech space, there arises the question of how we can be more responsible and secure in our digital transaction for both businesses and consumers,” Digital Pilipinas and World FinTech Festival PH Co-Founder Amor Maclang said.
The forum showed that tools like AI can transform data into valuable insights such as consumer patterns that help with fraud detection and business risk decisions and that AI fraud detection is fast, efficient, and effective.
AI can also reduce transaction costs, improve data management, and increase employee productivity.
“AI also helps organizations discover new patterns in data that empower them to serve a much wider base of people,” Mr. Vellore said.
FINANCIAL INCLUSION
Fintech companies and financial services providers can also reach the unbanked using AI. Patterns can be identified from alternative, traditional, linear, and non-linear data. It can also be used for making decisions, even for consumers considered as “thin-file” or those without files.
With the surge in fintech solutions, 77% of financial institutions have put innovation as their priority to strengthen customer retention.
AI can also reveal complex and unexpected variables that cannot be derived by manual analysis alone. It can “advise managers on how to use the information to increase profit,” Mr. Vellore said.
“Through AI, an e-wallet is no longer just a channel for paying bills but is now also a bank, and it contains your investment portfolio, insurance, and so much more. A ‘super app,’” he added.
In 2021, the Department of Trade and Industry launched a national AI road map, making the Philippines one of the first 50 countries worldwide to do so.
The road map aims to transform the country into a Southeast Asian AI powerhouse and leverage AI to boost local businesses’ regional and global cooperation.
“Anchoring our nation’s progress with AI is a must. The collaborative efforts among the public and private sector, the academes, and our ASEAN partners have greased the runway towards the movement of money through the power of data,” Ms. Maclang said.
The Bangko Sentral ng Pilipinas (BSP) wants at least 50% of the volume and value of retail transactions in the country done online by 2023. It also wants 70% of Filipino adults to have accounts with financial institutions by the same year.
The share of digital payments in the total volume of retail transactions in the country rose to 30.3% in 2021 from 20.1% a year earlier, according to latest data from the BSP.
Meanwhile, the value of payments done online represented 44.1% of total retail transactions last year, higher than the 26.8% share in 2020