Balancing retail transformation and data protection in the Philippines

DESPITE turbulence brought about by inflation, the Philippines’ retail landscape continued to enjoy post-pandemic gains, helped by its ongoing and rapid transformation and shifting customer behavior.

The number of e-commerce companies surged from 500,000 in 2020 to more than a million by 2022. Global retail e-commerce sales rose from 13.6% to 18% in the first year of the pandemic, alongside the drop from 70% of transactions being carried out in cash to 50%, which indicates the spread of digital payments. A recent study of ours found that Gross Merchandise Value (GMV) for purchases made through buy now, pay later (BNPL) options is seen to surge by 173% in 2024.

The use of artificial intelligence (AI) for personalized shopping was further embraced by businesses, no longer limiting it to chatbots for customer concerns. Mobile apps are updating to cater to evolving consumer needs, transitioning to more avenues for digital payment solutions, and more.

These digital leaps, reasonably, also bring to the forefront the pressing need for enhanced cybersecurity measures.

In particular, the country’s progressive thrust towards further digitalization spotlights the delicate balance between retail transformation and data protection, manifesting primarily through comprehensive consumer protection measures from both the public and private sector. This concerted effort aims to continuously develop a secure, innovative, and privacy-oriented retail environment which fosters trust and satisfaction.

Practically, what does that look like for the financial services sector and where is it headed moving forward?

First and foremost, the primary goal for companies, particularly those in fintech like ours, should be the reduction of data breaches and online attacks. This also involves the prioritization of data privacy through implementation of compliant data center infrastructure, a component which may achieve cyber resiliency. This has a higher chance for security and is a holistic approach to data protection in the retail sector.

As financial solutions are compliant with regulatory standards, the emphasis, secondly, must be on the effective and proactive cascade to its consumers. Effective data protection measures contribute greatly to positive customer experience, instilling trust among consumers by ensuring confidentiality and security to their respective personal data.

In a similar practice and in compliance to the Data Privacy Act 2012 (DPA) and its Implementing Rules and Regulations (DPA-IRR), promoting transparency and communicating this to consumers must go beyond the traditional means. There must be a proactive cascade to instill trust, and an engaging way to keep them informed. Privacy-focused social media challenges, interactive data privacythemed celebrations, or regular reminders through online channels.

Another is working towards an ideal landscape where we fully embrace and implement Privacy by Design (PbD), integrating security as the foundation of systems and processes to mitigate risk of privacy breaches.

As the country envisions a strategic alignment between data privacy and the evolution of the retail sector, we foresee a surge in innovative solutions which prioritizes seamless customer experiences and robust data protection mechanisms. The implementation of advanced encryption and authentication protocols is imperative for ensuring security of sensitive information in innovative technologies. These solutions, tailored to the evolving needs of Filipinos, derive their power from analytics and personalization.

We also anticipate a sophisticated retail system, where predictive analytics and learning will not only enhance operation efficiency but also contribute to privacy-preserving solutions. The Philippines will soon thrive through ethical and intelligent use of data, and establish a resilient foundation for the future of retail in the digital era. This means embracing measures that safeguards the interests of consumers and businesses, and also lays out the stage for a dynamic and secure digital future.