Innovation, education needed to increase fintech

To stimulate further growth in the financial technology (fintech) industry in the Philippines, there is a need for innovation among companies and startups, and education for the use of various fintech technologies among Filipinos, officials said.

Karl Lyndon Pacolor, Head of the Innovation and Collaboration Division at the Department of Trade and Industry (DTI), highlighted how fintech became one of the emerging sectors in the Philippines due to the growth of digital transactions during the pandemic.

Before the pandemic, the fintech industry in the country witnessed significant movement as many recognized the potential. Due to shutdowns caused by the Covid-19 pandemic, companies, including micro, small and medium-sized enterprises (MSMEs), and start-ups realized that fintech was the solution to the pandemic.

Fintech players, Pacolor noted, are considered to have driven the growth of the startup ecosystem, as evidenced by the increase in the number of industry players since the pandemic began.

“We want to make the Philippine technology start-up ecosystem, together with the fintech industry, an engine for economic recovery and be our main driver for inclusive growth and job creation. We see many players coming to address access to finance, do more digital transactions and leverage technologies such as blockchain, “he said.

Carlo Edmund Calimon, co-founder and president of StartUp Village, praised how startups today collaborate with each other, create their own mini-ecosystem and use platforms and solutions to create new fintech products and services.

“Because of the pandemic, everyone is forced to adapt to the new norm and use technology on a daily basis. Many startups have taken advantage of the situation,” Calimon said, noting that digitization has greatly helped MSMEs’ status below the challenging times of the pandemic.

Tony Isidro, CEO of FUSE Lending Inc., shared how their company, through GCash, liberalized the Philippines’ access to its various financial services. “At GCash, our vision is to provide financing to everyone. In recent months, we have tried to get closer to this vision, whether it is to offer savings, insurance, investments or even credit,” he said.

“We see more customers using loans on a daily basis … [and we aim to provide] financial service that is not only available but also transparent, “said Isidro.

Calimon stressed the need to protect end users in the process. He cited the need to identify “those who are legitimate and those who are not yet ready for the market. [Legitimate fintech companies are those that are] registered and certified by the authorities. “

To ensure consumer protection against fraud, Pacolor said that DTI will work closely with the various government agencies in terms of regulations, which provide the necessary licenses for startups to operate and to be able to perform services such as microloans or microfinance. “It is also important to note cybersecurity [and making sure fintech companies are] able to protect the identities of lenders and consumers when they perform these transactions … Scams are there and it’s really difficult, “he said.