FINTECH EASES CASH SUBSIDY DISTRIBUTION IN PANDEMIC, SAYS U.N.

FINANCIAL technology (fintech) has been helpful in delivering government cash subsidies to households as the economy grapples with the coronavirus pandemic, the United Nations said. Achim Steiner, co-chairman of the Task Force on Digital Financing of the Sustainable Development Goals, said in a media briefing on Tuesday evening that digital platforms and fintech made it quicker for the governments to provide cash aid to the “poorest of the community.”

The governments were also able to track where the most vulnerable groups are located with the help of fintech, he said. “It also extends to the government the ability to use digital platforms to transfer cash to literally hundreds of millions of people, if you take the world as a whole, has been another major breakthrough,” Steiner explained. In the Philippines, the Department of Social Welfare and Development inked a multilateral agreement in June with six fintech firms and financial institutions to disburse cash subsidies. These are Union Bank of the Philippines, Gcash, Paymaya, Rizal Commercial Banking Corp. (RCBC), Robinsons Bank and Starpay. Unionbank, with the help of its digital bank EON Bank, fintech arm UBX and fintech partner Dragonpay, distributed cash aid to 1.36 million beneficiaries. RCBC, meanwhile, said it has disbursed around P8.3 billion through its Diskartech Lite disbursement platform and ATM Go devices. Overall, Steiner underscored that digital financing adoption has accelerated due to the pandemic, noting that what supposed to happen in two to five years was accomplished in just a matter of weeks. The banking industry needs to understand the opportunity and risks that fintech may bring to better manage the technological aspect and the financial ecosystem, he explained. Fintechalliance.ph released in July a handbook outlining standards for the fintech industry in the Philippines to unify the regulators, policy makers and stakeholders. It discusses the standards for nomenclatures, definitions and classifications of concepts that are yet to be explored by the industry. Among the concerns the fintech group seeks to address with the handbook are inconsistency of terms, overlapping jurisdictions over semantically similar concepts, concepts not covered by existing taxonomies, implementation mismatch and policy conflict. The manual also discusses real-life examples of conflict between players and regulators, current regulatory framework and legal analyses of identified functional categories—including payments, remittances, lending and asset management, among others. “Given that it is [fintech] an everevolving space, players and regulators are on the same page to ensure consistency and understanding,” Fintechalliance.ph Chairman Angelito M. Villanueva said.