Tuesday, July 23, 2024

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FinTech Alliance turns crisis into opportunities amidst COVID19

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By Victoria “NIKE” De Dios

For astute business leaders a crisis is an opportunity in disguise, and this is what makes many business leaders.

The year 2020 is. backbreaking for everyone across all sectors. With the pandemic still gives uncertainties to other businesses, the Fintech Alliance on the other hand has still a reason to celebrate key milestones and be optimistic for 2021. Membership has increased by 36% with the entry of 14 new alliance corporate members. 

Among the new members include Alibaba Cloud (SINGAPORE) Private Limited, Brankas Digital Technologies Inc., Cashwagon (Green Money Tree Lending Corp.), Cebuana Lhuillier (PJ Lhuillier Inc.), Gorriceta Africa Cauton & Saavedra, Micro-D International Inc., MoneyGuru (MoneyMax), Netbank (Community Rural Bank of Romblon), PayMongo Philippines Inc., WeFund Lending Corp., Salesforce, and Xendit Philippines Inc.

The pandemic has opened a chance for a paradigm shift in the financial world and the Alliance has found itself in the forefront in navigating the so-called “new normal”. With the call to lessen face-to-face transactions, the Alliance actively collaborated with the government, regulators, and legislators to carry out this campaign. One of the evident results would be the exponential growth in transaction volume and value on digital payments and eCommerce, especially with most Filipinos adopting to digital transactions due to restricted mobility. Alliance members also helped the government in quickly disbursing the social amelioration program to 18 million families nationwide leveraging digital payments for greater transparency, speed, and efficiency. The Alliance is committed to helping the Bangko Sentral ng Pilipinas (BSP) in achieving its twin goals of reaching 50 percent of financial transactions into digital, and 70 percent of adult Filipinos to be part of the formal financial system by end of 2023.

The Alliance leveraged on its various platforms to promote digital philanthropy to generate donations for victims of Taal Volcano eruption in coordination with Caritas Manila, and assistance to front-liners at the height of the pandemic in partnership with the Philippine Disaster Resilience Foundation. 

As health and safety was the top priority, it conducted the Fintech Alliance Work-from-Home Digital Series focusing on COVID-19 Digital Contact Tracing and the emergence of StaySafe.Ph, a community-driven contact tracing, health condition reporting and social distancing system.

Recognizing the need to quickly recover from the pandemic, the Alliance staged a Digital Forum entitled “We Bounce Forward” in partnership with the BSP.  This digital event was BSP Governor Diokno’s first webinar right after the declaration of the enhanced community quarantine.

The Fintech Alliance has also been the premier thought leader and resource on relevant digital-related industry issues and concerns. It has submitted a number of industry position papers and technical statements on vital fintech and digital-related policies by regulators and legislators. Among them include submission to the Congressional Committee on the Grace Period Provisions under the Bayanihan to Recover as One Act, Part 2 (“Bayanihan Act 2”) and comments on the BSP’s draft circulars on open finance, digital bank licensing, payment system oversight, operators of payment systems, and green financing, among others, as well as insights on National Privacy Commission’s (NPC) guidelines on the processing of personal data for loan-related transactions. The most recent industry dialogue was held a week before the Christmas break with the Securities and Exchange Commission (SEC) on the planned interest rate capping for short-term consumer credit products such as payday, salary, and personal loans. An industry-wide study is needed to determine the ceiling of interest rates charged by nonbank financial institutions, such as mobile lending platforms, on borrowings, and any rate cap is backed by “good” and “robust” data to make sure that it is justified.

In the same manner that the ceiling on interest and finance charges for credit card receivables was imposed only after the BSP’s examination of various inputs, including a study on the presence of risk-based pricing, the characteristics of different credit products, an analysis of the behavior of bank lending rates, a review of practices in other jurisdictions, and consultations with the industry. The Alliance’s aim is to continuously foster a business and regulatory environment and support structures that encourage the supply of fair, transparent, and affordable financial services. This includes the development and submission of the Philippine borrower’s taxonomy for industry standardization.

The Alliance was the country’s first to adopt an industry-wide code of ethics and a code of conduct passed by each Alliance member in 2019. This initiative was in collaboration with the BSP, Department of Trade and Industry, NPC, Securities and Exchange Commission, and the Bureau of Internal Revenue.

The Alliance has also forged important partnerships with fintech major players like the Asia Pacific Financial Forum (APFF) and Thai Fintech Association (TFTA) to promote fintech industry best practices in the region, adding to the growing list of collaborators. On the sidelines of the Singapore Fintech Festival, the Alliance also signed up for the Philippines Fintech Industry Sandbox initiative with the UK Embassy and the FinTech Philippines Association.

Among the highlights of the year included the digital publication of the Philippines Fintech Report 2020 focusing on the emerging trends and developments in the industry, participation in the annual BSP financial education stakeholders virtual expo, DTI’s ASEAN committee on consumer protection (ACCP) peer review stakeholders’ dialogue on consumer protection law and policy Philippines’ project, British Embassy’s Southeast Fintech Roundtable Philippines on the digital transformation of the financial industry in the Philippines and the United Kingdom, and the World Bank’s Philippines economic update online launch forum plus a number of webinars with strategic local and global partners.

It has been a difficult year, but it was also a perfect opportunity for the Alliance to actively advance fintech innovations. In 2021, fintech is seen to jumpstart economic recovery and try to be back on track as immediately as possible. Policy reforms and digital infrastructure are needed for growth.

“Fintech Alliance is ready to help in getting back our economy on its feet again. The challenges this 2020 should excite us to act on the problems by giving out digital solutions. Collectively, the Alliance is committed to accelerate the realization of a digital economy amidst the pandemic”, Lito Villanueva, FinTech Alliance.PH chairman said.   

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