To spur further growth in the financial technology (fintech) industry in the Philippines, there is a need for innovation among firms and startups, and education for using various fintech technologies among Filipinos, officials said.
Speaking at online forum titled “Fintech Philippines: Fintech Space as the Thriving Ground for Upgrading Financial Services,” Karl Lyndon Pacolor, chief of the Innovation and Collaboration Division of the Department of Trade and Industry (DTI), highlighted how fintech became one of the emerging sectors in the Philippines due to the growth in digital transactions during the pandemic.
Pre-pandemic, the fintech industry in the country witnessed substantial movement as many recognized its potential. Due to lockdowns brought about by the Covid-19 pandemic, businesses, including micro, small and medium enterprises (MSMEs), and startup firms realized that fintech was the solution to the disruption caused by the pandemic.
Fintech players, Pacolor noted, are seen to have driven the startup ecosystem’s growth, as evidenced by the increase in the number of industry players since the pandemic began.
“We want to make the Philippine tech startup ecosystem, together with the fintech industry, an engine of economic recovery and be our main driver for inclusive growth and job creation. We see a lot of players coming to address access to finance, do more digital transactions and utilize technologies like blockchain,” he said.
Carlo Edmund Calimon, co-founder and president of StartUp Village, lauded how startups today are collaborating with each other, creating their own mini ecosystem, and using platforms and solutions to create new fintech products and services.
“Because of the pandemic, everybody’s forced to adapt to the new normal and use technology on a day-to-day basis. A lot of startups have taken advantage of the situation,” Calimon said, noting that digitization has largely helped MSMEs “elevate” their status during the challenging times of the pandemic.
Tony Isidro, chief executive officer of FUSE Lending Inc., shared how their company, through GCash, liberalized Filipinos’ access to its various financial services. “In GCash, our vision is to provide finance for all. In recent months, we’ve made the effort to move closer to that vision, whether in terms of offering savings, insurance, investments or even credit,” he said.
“We’re seeing more customers availing loans on a daily basis… [and we aim to provide] financial service that is not only accessible but also transparent,” Isidro said.
Calimon stressed the need to protect end users in the process. He cited the need to properly identify “those that are legitimate and those that are not yet ready for the market. [Legitimate fintech companies are those that are] registered and certified by the government.”
To ensure consumer protection against fraud, Pacolor said the DTI will work closely with the different government agencies in terms of regulations, which provide the necessary licenses for startups to operate and to be able to do services like microlending or microfinancing. “It is also important to take note of cybersecurity [and making sure fintech companies are] able to protect the identities of lenders and consumers in doing those transactions… Fraud is there, and it’s really difficult,” he said.