RAPIDLY evolving customer expectations, rising operating expenses, and developing technology-enabled competitors propel banking, financial services and insurance (BFSI) services in the Philippines to continuously expand its capabilities and further the development in the industry. As a result of the Covid-19 pandemic, the Philippines is seeing a surge in digital banking, with numerous digital-only banks announcing plans to enter the market and older institutions rapidly updating their online offerings.
The Covid-19 situation reveals the need for local banks and other financial institutions to be more inclusive, and the urgency to address the huge gap in financial services for small businesses, both of which are key to growing the economy with 99.5 percent of registered businesses in the Philippines classified under MSMEs.
FILLING THE GAP WITH FINTECH
RELENTLESS innovations in fintech applications and technologies are enabling more Filipinos to do financial activities even without the need for a bank account. Fintech products such as e-wallets enable users to transfer money digitally and build credit, making it easier for them to borrow funds for future use.
The proposed framework by the Bangko Sentral ng Pilipinas (BSP) for open banking is looking to benefit MSMEs by encouraging financial inclusion and making the deployment of innovative financial services faster and easier. Having the right infrastructure enables banks and fintech companies to create more economical, personalized, and seamless solutions for MSMEs, allowing easier distribution, data sharing, and payments enablement.
This new fintech innovation uses a set of technologies and rules to create a safe and user-friendly way to connect banks, fintech companies and other financial service providers. This then creates access to financial data that will lead to new applications and services that can ultimately benefit MSMEs, which are considered to play a crucial role in uplifting the Philippine economy ravaged by the pandemic.
FUELING FINTECH IN PHL
THE fintech industry in the Philippines is robust, and demand for fintech products and services is expected to continue rising. The number of start-ups entering the fintech sector in the country is growing at an average of 16 percent annually, according to the Department of Trade and Industry (DTI).
To contribute to empowering the local BFSI industry, Tata Consultancy Services (TCS) continues to develop digital solutions such as transaction processing, domain consulting, change management, and cognitive solutions to enable financial firms to transform their operations and improve their services. TCS BaNCS product suite, in particular, empowers fintech companies with innovative technologies available through the cloud. This enables fintech companies to become more agile as they leverage the power of new and extended ecosystems.
In the Philippines, TCS defined the Strategic Technology and Digital Transformation Roadmap for UnionBank, enabling it to realize its vision of being a leading digital-friendly bank.
As more fintech solutions become available and adoption expands, the Philippines will be on its way to becoming a more financially inclusive country. This would mean more small businesses getting access to the financial services that they need.
TCS and its local partners participate in this endeavor by continually developing financial solutions that drive growth, reduce costs and mitigate risks, allowing for faster and more seamless transformation and expansion.