THE BATTLE FOR FINTECH SPACE – FINEX FILES
THE Philippines has one of the youngest populations worldwide with a median age of 24 according to the Philippine Statistics Authority; a sweet spot for the country’s economic fortunes. It is also an indication that the country is an attractive market for the introduction of digital banking products.
With a population base of 103 million, the Philippines has recorded an internet penetration rate of 55.5 percent and a 66.5 percent Facebook penetration rate based on internetworldstats.com data. It also has an amazing 117 percent penetration rate in terms of mobile subscriptions. Despite this, only 2% of retail transactions are done through digital payments and 98% cash. Because of this potential, the Bangko Sentral ng Pilipinas wants to increase the share of digital payments to 20 percent of total transactions by 2020. The BSP is leading the implementation of the National Retail Payments System (NRPS) to shift more transactions to online processes in a cash-heavy economy.
Central bank Governor Nestor Espenilla was tagged by TheAsset magazine as “the disruptor” for his vision of deploying technology to shake up the status quo and break down silos in the payments arena. His main weapon moving forward is the NRPS, which is intended to allow full interdependability of the central bank’s goal is to create open ecosystems that will enable - ucts to connect to everyone in the system. He is looking at a clearing and settlement system that will values electronically from bank account to bank account and from digital wallets to another, and he aims to keep this clearing system safe by maintaining its integrity.
For this reason, we will expect - tech ecosystem. Fintech News Singapore, in an article, counted 60 start-up scene. The sector is populated by mobile payments and outlets (41 percent), alternative blockchain (12 percent), comparison (8 percent), credit rating and analytics (5 percent) and payroll (5 percent). Solutions that provide fast and convenient funding, lending as well as payment solutions that do not require a particular sophistication for the consumers are those that are considered promising in the Philippine arena.
Clearly, the BSP is keen on this digital revolution as it is now closely monitoring platforms that operate in areas like cryptocurrencies, peer-to-peer lending and crowdfunding. It has issued general guidelines governing digital currency exchanges. At the same time it has been careful in not intervening too much, waiting for the right time to take action on a
There are a lot of challenges moving forward. The greatest is what we all know: Poor digital infrastructure. No less than Alibaba’s Jack Ma said that Philippine internet speeds are “no good”. Banks, meanwhile, have cited strict regulations on KYC or know your customer as a major obstacle in their desire to leapfrog to the digital space. Infrastructure constraints are not just in the digital space but in the physical world as e-commerce transactions that will require abilities to deliver in the logistical space are lacking. Hence, the government’s “Build Build Build” program is most welcome. Finally, there’s the issue of enhanc
The battle for fintech space will occur under this milieu and we hope the challenges will be hurdled through a delicate combination of cooperation and competition. This battle must be it is competition that will ensure that only the best type of service survives. This battle is good news in an economy where we still have a large segment of the population underbanked or even unbanked. Financial inclusion activists are will serve as the last mile that will allow service delivery to those who need it the most. As I have always - tions must consider availability, affordability and acceptabilility for it to make real progress.