Through Jenina P. Ibanez, Senior Reporter
THE BANGKO SENTRAL ng Pilipinas (BSP) wants foreign investors to invest in financial services in the Philippines by bringing in new technologies and technical expertise.
“As we build our digital finance ecosystem, we encourage foreign investors who can bring cutting-edge technologies and technical expertise to tap into the untapped potential in the financial services space and be our partners in realizing our our goals of economic growth and financial inclusion,” BSP Governor Benjamin said. says E. Diokno.
The central bank of the Philippines said in a press release on Monday that technology and expertise will support the competitiveness of local banks.
The technology would also allow banks to expand access to new markets through partnerships, BSP added. This market expansion should benefit financial consumers.
As part of its digital payments transformation roadmap, BSP plans to convert half of retail payment volume to digital transactions and bring 70% of Filipino adults into the formal financial system by 2023.
Its 2019 Financial Inclusion Survey found that 71% of Filipino adults had no bank account, while more than 30% of cities and towns had no bank offices in the third quarter of last year. .
“By reaching out to the unserved and underserved, fintech service providers can tap into a large customer base, diversify revenue streams, and secure new growth opportunities in the country, thereby improving the efficiency of banking operations. “, said BSP.
A Philippine Institute of Development Studies (PIDS) working paper released earlier this month said the government should help the financial technology (fintech) industry meet its funding needs and talent development for the sector to grow.
The availability of venture capital, he said, would support the growth of fintech startups.
Meanwhile, the fintech industry anticipates a highly competitive business environment in 2022 as more services and products are expected to launch, an industry group official said.
“The Fintech Alliance.PH sees 2022 as an era of massive competition for the fintech and digital banking industry. As more digital unicorns enter the field, we expect to have an even more competitive market Fintech Alliance.ph Angelito M. Villanueva said in a Viber message last week.
“New services, features and products will be part of the development pipeline we plan to launch next year.”
Fintech business activities have increased during the pandemic as lockdown restrictions limit face-to-face transactions.
The Fintech Philippines 2022 report revealed that the country now has 222 fintech companies. Launched by the alliance and Fintech News Philippines, the report says 27% of businesses are working on loans while 20% offer payment services. 13% offer e-wallet products and 12% are cryptocurrency or blockchain companies.
Mr. Villanueva said more and more Filipinos are using digital payments and cryptocurrency transactions.
“This scenario is a good indication that the industry will experience greater revenue growth over the coming year, especially with the recent developments in the industry,” he said.
These developments include the central bank of the Philippines’ new regulatory framework for digital banks, he said. Mr. Villanueva noted that PASB’s open funding framework would support greater financial inclusion.
But cybersecurity threats are also on the rise, prompting companies to strengthen security and fraud management systems.
“We’ve seen more sophisticated ways in which hackers and other fraudsters are infiltrating the processes and systems of even leading digitized universal and legacy banks,” Villanueva said. “Cyberattacks such as scams and cyberfraud will always be a constant threat to the health of the digital finance ecosystem.”
Meanwhile, government agencies have also said they plan to tighten taxation and regulation of fintech companies as part of efforts to broaden the tax base. The Bureau of Internal Revenue plans to collect information that would help the agency identify fintech companies not explicitly covered by existing rules.