Foreign investment in financial services sought

Through Jenina P. Ibañez, Senior reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) wants foreign investors to invest in financial services in the Philippines by bringing 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 harness the untapped potential in the financial services space and be our partners in achieving our goals. economic growth and financial inclusion ”, Benjamin Governor of BSP. said E. Diokno.

The Philippine central bank, in a press release on Monday, said the 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 is expected to benefit financial consumers.

As part of its roadmap for the transformation of digital payments, BSP plans to convert half of the volume of retail payments to digital transactions and integrate 70% of Filipino adults into the formal financial system by 2023.

Its 2019 Financial Inclusion Survey found that 71% of Filipino adults did not have a bank account, while more than 30% of cities and towns did not have bank offices in the third quarter of last year. .

“By reaching out to the unserved and underserved, FinTech service providers can tap a large customer base, diversify their revenue streams and secure new growth opportunities in the country, thereby improving the efficiency of businesses. banking, “BSP said.

A Philippine Institute for Development Studies (PIDS) discussion paper released earlier this month said the government needs to support the FinTech sector to meet its funding and talent development needs for the sector is growing.

The availability of venture capital, he said, would support the growth of fintech startups.

“MASSIVE COMPETITION”
Meanwhile, the FinTech industry anticipates a very competitive business environment in 2022 as more services and products are expected to be launched, 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 and 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 post last week.

“New services, features and products will be in the development pipeline that we plan to launch this coming year. “

Fintech business activities have increased during the pandemic as foreclosure restrictions limit face-to-face transactions.

The Fintech Philippines 2022 report found that the country now has 222 FinTech companies. Launched by the alliance and FinTech News Philippines, the report indicates that 27% of companies work on credit 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 recent developments in the industry,” he said.

These developments include the Philippine central bank’s new regulatory framework for digital banks, he said. Mr. Villanueva noted that PASB’s open funding framework would promote greater financial inclusion.

But cybersecurity threats are also increasing, prompting companies to strengthen their security and fraud management systems.

“We have seen more sophisticated ways in which hackers and other frauds infiltrate the processes and systems even of the major digital universal and traditional banks,” Mr. Villanueva said. “Cyber ​​attacks such as scams and cyber fraud will always be a constant threat to the health of the digital finance ecosystem. “

Meanwhile, government agencies have also said they plan to tighten the 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 financial technology companies that are not explicitly covered by existing rules.

Stephen V. Lee