AI to boost the PHL fintech industry
ARTIFICIAL INTELLIGENCE (AI) and effective data management in business operations will boost Philippine financial technology (fintech), according to AI-powered platform Provenir.
“The pandemic and its restrictions caused a huge generational surge in the emergence of digital services and has required businesses to adapt at a very high speed,” said Provenir General Manager for Asia-Pacific Bharath Vellore.
Businesses and institutions are now expected to offer financial services that will 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 companies’ ability to harness the potential of data.
“AI in fintech opens the doors to the digitization of credit-rich verticals and diversifies products and opportunities. Agility and speed of personalization play a crucial role in providing personalized offers to customers, helping in hyper-growth, Mr. Vellore said.
Fintech is not limited to digital banks and neobanks. The industry also includes embedded and open financial services, which are on the rise.
“With so much innovation happening in the fintech space, the question arises as to how we can be more responsible and secure in our digital transaction for both businesses and consumers,” said Digital Pilipinas and World FinTech Festival PH co-founder Amor Maclang.
The forum showed that tools like AI can transform data into valuable insights like 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 enable them to serve a much wider base of people,” Mr. Vellore said.
FINANCIAL INCLUSION
Fintech companies and financial service 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 to make decisions, even for consumers considered “thin files” or those without files.
With the rise of fintech solutions, 77% of financial institutions have made innovation 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 profits,” Mr. Vellore said.
“Through AI, an e-wallet is no longer just a channel for paying bills, but is now also a bank, containing your investment portfolio, insurance policies and much more. A ‘super app,'” he added.
In 2021, the Department of Trade and Industry launched a national AI roadmap, making the Philippines one of the first 50 countries worldwide to do so.
The roadmap aims to transform the country into a Southeast Asian AI powerhouse and leverage AI to boost local businesses’ regional and global collaboration.
“Anchoring the nation’s progress with artificial intelligence is a must. The collaboration between the public and private sectors, the academies and our ASEAN partners has greased the runway towards the movement of money through the power of data,” Maclang said.
The Bangko Sentral ng Pilipinas (BSP) wants at least 50% of the volume and value of retail transactions in the country to be 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 the latest data from the BSP.
Meanwhile, the value of payments made online represented 44.1% of total retail transactions last year, higher than the share of 26.8% in 2020. — KB Ta-asan
