The many ways by which tech can revolutionize industries, revive and strengthen ailing ones, and even protect businesses from the most dangerous threats were the topics covered during the third day of the World Fintech Festival Philippines on Dec. 9.
Rural banks, coops, and startups can maximize it to provide financing relief to the critically-impacted sectors. Businesses were advised to use a customer-centric approach in the use of their most agile solutions. Fintechs are confronted by the realization that they have to embrace data privacy and security by design—or fall prey to cyber criminals.
Fintech Extends Lifeline to Struggling MSMEs with Underbanked Motorcycle Borrowers Jumpstarting the Economy
With the objective of jumpstarting the economy from the paralysis caused by multiple lockdowns, fintech-based companies established ways to help the grassroot members of the society by providing them access to loans, livelihood opportunities, and insurance that helped alleviate their means of living in the midst of the pandemic.
“We share the same sentiment towards providing for the SME sector’s needs through crowdfunding. By connecting businesses, we are able to address their needs. The group has funded over $200M for SMEs in Taiwan, Indonesia, Cambodia, among others. The segment that needs most help is SMEs. We are all here to help this segment which comprises more than 40% of employment,” said Edison Tsai, Executive Director of SeedIn Technology
Esquire Financing Chairman and CEO Rajan Uttamchandani recommends viewing 2020 as a year of sacrifice, where provisions and risks are higher but provides stimulus for the SME segment. “Our 5 Cs of credit have changed. We added a 6th C: New kind of business transformation is. We worked with Go Negosyo and DTI because demand for funding is very high for the SME sector. 49% unemployment rate really affects this sector and they don't have the liquidity buffer large corps have. This is a sacrificial year to help the economy bounce back. It’s not about profitability but providing a helping hand to the segment that needs it most: SMEs and micros.”
Speaking about COOPs, Roy Miclat, 1 Cooperative Insurance President and CEO, said, “In this pandemic, we hastened the launching of digitization of COOPs. They are one of the most conservative orgs in the country as they are risk averse. But because of the pandemic, the appreciation of tech grew among COOPs. The COOPs thrive in crisis. It’s in their DNA. One of the initiatives next year is we’ll introduce climate risk disaster insurance.”
Another vulnerable sector that can help reinvigorate the economy are the currently underbanked motorcycle borrowers. “We had never released as many motorcycle loans as this 3rd or 4th quarter of 2020,” shared Larry Ocampo, CitySavings Bank President and CEO. “We wanted to be part of the solution in jumpstarting the economy by providing Filipino workers a means to go back to work. The more people go back to work, the faster the economy grows.”
With mobility efforts shining the spotlight on motorcycles as both private and public transport, Ocampo is confident that 2021 will see an acceleration in the motorcycle business. “Motorcycles as part of business transport are more and more relevant. I think in relation to other SEAsian countries, capital is much lower in the Philippines. We are bullish about 2021, and expect a triple digit growth next year.”
“We have to take the risk of helping next year. It’s about the 2020 swing and you have to start somewhere,” added Uttamchandani.
Business Urged to Prioritize Data Security as Cyber Threats Skyrocketed by 41% in Stay-at-Home Economy
As businesses continue to migrate to online platforms with a 1,000% growth noted in the last 8 months, organizations are pivoting to prioritize cloud, AI, data regulations, and cybersecurity as cyberthreats have increased by 41%.
“There is significant acceleration to the cloud among organizations. Fintechs all about digital business, flexible working arrangements. Cyber resources are scarce resources so we have to point out the most important things,” he added.
“For Globe, security and data privacy for Globe is centered on customer care. We have invested about $90 million in the past years. Cybersecurity is placed on top 5 of top-level priorities,” shared Anton Bonifacio, Chief Information Security Officer at Globe. “We do proactive and reactive collabs to protect our customers. We don't charge banks for this protection.”
Atty. JJ Disini, Managing Partner of Disini Law Office, stated that, “We might start to see government agencies considering an overarching regulation on data sovereignty. The conversation is starting and fintech is a large part of that because data is essential to grow. This data needs to be able to flow in terms of fintech and financial institutions because the Philippines has one of the strictest regulations in terms of this.”
Underscoring the importance of a data stream that’s heavily fortified, National Privacy Commission (NPC) Commissioner Raymund Liboro shared that their work with Fintech Alliance to create a Code of Practice that ensures the data rights of consumers is not overridden by data processing.
“NPC believes the critical point is having that balance of ensuring data protection for consumers is primordial and enabling companies. While progress and development are assured, it likewise presents risks to individuals availing such services. Last year, complaints claimed that there are companies practicing harassment, high interest in loans, and public shaming. NPC took down 20 lending companies who violated regulations,” said Liboro.
“Privacy is an enabler of trust. Fortunately, unlike typhoons, earthquakes, privacy risks are man- made and can be mitigated. Governments and businesses will be judged not only by their products and services, but also by how they protect data of consumers,” he continued.
DX from Disaster: Crisis, COVID-19 Birthed Some of the Most Innovative Apps in 2020
The year 2020 was a turning-point in the campaign to digitalize the nation, as it finally convinced even the skeptical that tech could spell the difference between survival and success.
The COVID-19 pandemic paralyzed business and economic activity and highlighted the need for a more agile business landscape.
“For us, we are optimistic that what we went through in 2020 made people understand the benefits of going digital,” Yves Gonzalez, Google Philippines Head of Government Affairs and Public Policy, continued. “In 2021, all stakeholders will pivot their strategy. You need to be digital. One of the sharings I wanna do this year is, for the first time, even in legislation, everything is digital now. Previously those were all face to face meetings. Some of the old ways were shifted. We as a country will really embrace digitization further.”
As stated by moderator Good Tech Holdings President and CEO Jove Tapiador, “So when enterprises think of investments in ICT, they need to consider how tech capabilities can empower them and enable strong recovery,” he said. KPMG CIO Jallain Manrique said, “Having a people-first mindset is important to be a resilient organization. So I think it revolves around that area. Technology will just follow. Necessity is a mother of innovation. If there is a need then the tech will provide that.”
Having worked with the government since March, Yves Gonzalez has seen how tech that is created to answer a necessity is inarguably more sustainable and relevant. From edutech for 22 million students to plotting testing centers on GoogleMaps and Waze, tech initiatives that would normally take years to roll out were completed in months.
“The private sector can work with the government to do machine learning. We're hoping that this experience teaches us the value of cloud. As we move forward, we can get things done quickly if we collaborate and if we are geared by a common mission,” he added.
While Google PH has focused on education and accessibility of testing sites, Globe has concentrated on fintech through GCash and telemedicine through KonsultaMD. The former of these recently recorded 1 trillion pesos worth of transactions. Globe Chief Information Officer Carlo Malana said, “It's not just about the next 6 months. We always take care of our customers. At the end of the day, tech must be used by the people for the people. There's always a mission behind tech.”
Multisys Founder and CEO David Almirol advises that we should be enablers of our partners. “It's a learning process. It is everyone's duty now to support each other. We all know no company, no big conglomerate is perfect. We should combine the skill sets and strengths we have.”
While working with the government to develop the Stay Safe App, Almirol said he too realized the need to always focus on relevance. “Last month, we were able to launch 3 new platforms for MSMEs that can’t afford expensive platforms. We were able to combine 15 courier groups in the Philippines, and we also launched a shopping platform which MSMEs can use where they can sell and operate with cashless payments.”
“We want to meet the customers where customers want to be met. We try to make it easy and convenient for customers to repay loans as possible. In PH, it is very popular to use Viber, so we integrate channels where they want to be met. COVID has pushed us to do this a lot faster,” shared Collectius Founder and CEO Gustav Eriksson. “Everybody is focusing on maintaining customer relationships. Winners out of this will be the guys with systems and processes that can maintain customer relationships in this difficult time,” Eriksson said. “When the economy starts growing again, you have customers that still want to deal with you.”
