Technology era 4.0 ushered in a digital era for all fields, leading to the banking and finance field. The term Fintech is not too unfamiliar, but it is unlikely that everyone understands what Fintech is? And below, Infofinance.vn will provide all the knowledge you need to know about Fintech in Philippines today, please pay attention below this article.
Table of Contents
What is Fintech
Fintech is a concept or a new term that recently appeared, this is an English term that is combined between two other terms: Finance + Technology. Then Fintech is understood as Financial Technology.
This term appeared after 2008, but until now, when the 4.0 technology exploded, it was really interested. It changed the way it works in the financial, banking, and monetary sectors and focuses most heavily on the financial sector. Fintech was opened up as a whole new field affecting the financial market in particular and banking in general.
Fintech financial technology here is concretely understood that the new products, applications, services, processes … of technology are applied to the financial market to help it improve efficiency more efficiently than. before. More complete financial services, products suitable for the Internet era to help consumers more convenient and faster in all needs.
Currently, most people are using Fintech but do not understand what it is, in the past 3 years, Fintech has gained a priority when there are too many new technologies to support the best finance forming a new service.
What is Fintech ecosystem
Fintech ecosystem is actually a name or in other words it is the environment for Fintech to grow. In Philippines, the Fintech ecosystem exists based on 3 factors: market access, legal support and ability to access capital.
The Fintech ecosystem currently on the market focuses on the following areas:
- Payment intermediaries
- Personal Finance
- Bank loans
- Insurance technology
- Digital Bank
- Credit score
- Crowdfunding
Financial Technology Company – Fintech
Currently, Fintech companies are the main service providers, responsible for running programs, designing and creating financial service products on Internet platforms, mobile phones for banks and finance companies. Previously, that number was very rare, but now the Philippines is currently home to more than 190 fintech companies, with lending (24%), payments (21%), digital wallets (12%), and remittances (12%) being the four most predominant verticals.
Features of Fintech
Fintech in the bank is to support money transfer and payment services, and in the financial sector, it is the platform that connects borrowers with lenders without having to meet in person. All processes such as access, registration and completion of procedures, automatic review are supported indirectly through lending companies using Fintech.
Fintech operates on artificial intelligence, seeing this as a robot that can identify, collect and establish financial needs and services through an algorithmic system that companies set up for themselves. . Because of that, nowadays people find that online loan applications all have relatively similar loan processes. Fintech is the first step of technology 4.0 in finance, it is devoted to changing the habits of consumers, borrowers from media to online to help customers of banks and finance companies to realize their jobs. previously carried out the tradition directly.
With Fintech, it will also change financial human resources in the future, you are not only good at professional expertise but also have to understand and do IT related jobs, human resources are not used as much as before. That 1 person can support many customers at once.
Fintech products
Electronic currency – Bitcoin
Cryptocurrency, or Bitcoin, is one of the prominent products in the financial industry today. This is a decentralized cryptocurrency or digital currency that can be exchanged directly with an Internet-connected device such as a phone, computer or tablet without going through a financial unit.
Bitcoin can be used for common transactions between many countries without going through a bank or an intermediary connecting company / company. And there are many exchanges on the Internet that are used to buy and sell Bitcoin money, it is seen as real currency with circulation, payment value or reserve. This is an outstanding product or achievement of Fintech financial technology in recent years.
Electronic wallet
E-wallet is a form of an electronic account, allowing users to pay all expenses and bills via the Internet. People imagine it as an invisible and encrypted money holder through a phone app, wallet users can receive money or transfer money to anyone in any unit via their account. only need an Internet-connected device.
In Philippines, people can know some famous types such as: Momo, Payoo, ViettelPay, ZaloPay….
In the world, e-wallet has the largest payment function, all countries can use if there is a need for international shopping, international money transfers: Paypal, Airpay, Google Wallet, ebay …
Loans
The pioneer for Fintech in loans is Lending Club, a lending club in the US. They apply technology to provide the fastest loan, borrowers can receive loans without meeting. Up to now, this form is quite popular all over the world through the product App Loan Online. Now to get a loan, to find investors to pour capital, people only need to use 1 app or any website, then the app unit will connect the borrower with the lender then the two parties agree on the electricity. …
Fintech in finance
One of the most effective forms of loan products is the online loan application, people can choose the apps they want to proceed to choose the limit, term and register their profile right there. Very quickly you will receive the requested loan, the money is transferred to the bank account and when paying, everyone can transfer online.
In Philippines nowadays, there are many units applying for credit loans, finance via apps such as: Robocash, MoneyCat, Kviku, CashMart, … not only finance companies but banks also start realizing. currently lending in this form.
Securities trading support
Previously, people wanted to trade, buy and sell securities, people had to go directly to the exchanges to buy directly from the sellers, but now it’s different thanks to Fintech technology that investors can participate in buying and selling stocks. votes according to their needs. Currently, only with a mobile phone or a computer connected to the network, but anyone who needs to invest in stocks or sell them quickly can proceed directly without having to go through a broker.
Online money transfer
Everyone is probably too familiar with the way money was transferred before, every transaction must be done at the bank. To transfer money to someone you have to bring cash to the bank or choose to deduct a bank account with a payment order at the branch. But thanks to Fintech technology, nowadays people do not need to waste time filling out papers at the remittance bank but can sit at home and log in the money transfer application to transfer any bank or any time.
The current application that banks apply is Internet Banking (Website) Mobile Banking (app on mobile phones) or bank plus to quickly transfer money online.
Fintech example
Fintech in finance
With financial Fintech, people can immediately think of today’s fast lending applications such as:
Doctordong Quick Loan App: 100% online loan support application not only on mobile phones, but also on computers, online registration and automatic approval without meeting to help borrowers get loans quickly, Loans onlien through the app help lenders can support everywhere, it is not necessary to build branch facilities across the country.
Fintech in the bank
Mobile banking application is one of the typical examples of a bank’s financial technology, it is an app managed by the bank and cooperated with Fintech companies to develop. Through the application, ATM card users can quickly and securely manage their accounts, view transaction history, transfer money to account numbers, phone numbers, card numbers … without the need for a bank. row. Not only that, but you can recharge phone, pay for service bills, living activities, buy air tickets, and book hotel rooms.
Fintech in stocks
Nowadays, instead of opening many exchanges with a large staff, brokers can now switch to online form. Securities players do not need to go to an exchange, do not need to meet a support consultant and can place buy and sell orders with stocks listed on the floor. Thus, it can help investors decide their buying and selling time, helping players keep track of daily stock information.
Some typical applications such as Olympatrade, Mitrade …
Digital Bank transformation in Philippines
Digital banking is an inevitable change in response to changing customer expectations, supported by technological breakthroughs, increasing customer experience, and increasing business efficiency.
Digital Banking also represents a transition from traditionally offering products and services to digital and online spaces.
How Do Banks in Philippines Need to Approach Digital Transformation?
3 Key Factors When Converting Bank Numbers
1. Technology Solution: Choosing the right solution, scalable, secure, and scalable.
2. Increase Customer Experience: Online, branchless experience
3. Koanh Business Efficiency: Business growth
3 steps
1. Determine the current situation
– Market research / global banking trends, China
– Market research / Philippines digital banking trends
– Assess the current status of the bank based on: Technology, Customer Experience, and business performance.
– Choice of solution: Build by yourself or buy from outside.
2. Determine the scope of conversion
– Model Design: Product range and technology scope
– Define the role of the HR apparatus from senior to all personnel (CEO-> employees)
– Make a route
Deploy, analyze, evaluate, change, and repeat until it works.
3. Transforming implementation
– Establish centers, organize and assign implementation tasks
– Selection of technology partners
– Deploy -> operate -> evaluate -> adjust.
3 Core Elements of Fintech
1. Technology (Technology)
– Ability to expand to mass customers, high transaction volume
– Ability to integrate with traditional channels for customer analysis
Open systems can communicate using APIs
– Data processing and analysis capabilities (Bigdata)
– Open banking architecture, real-time processing
– The highest security and safety.
2. User experience
– Build customer life cycle
– Build employee lifecycle
– Product / service experience design
– Deep understanding of customers
– Omni Channel Marketing: Understand and interact with customers 24/24
– Data-driven operation
3. Business (Business Model)
– Proposing customer value
– Outstanding new product ranges, suitable to new customers for example micro finance.
– Need a new organizational structure based on technology talent to operate
– Introduce new processes to match new products / businesses / experiences
Digitization / automation of processes based on data and numerical transformation.
Bank Number Conversion Maturity Assessment
– Level 1 (Digital Bank 1.0): Disperse: Digital banking capabilities none or present but scattered and not planned to be exploited and used according to Banking Framework 1.0
– Level 2 (Digital Bank 1.0): Emerging: Digital Banking Capabilities in accordance with Banking Framework 1.0
– Level 3 (Digital Bank 2.0): Developing: Digital banking capabilities are adequate, but only partially efficiently exploited and in line with global best practices under Banking Framework 2.0
– Level 4 (Digital Bank 2.0): Maturity: Digital banking capabilities are fully and efficiently exploited for the most part and are in line with global good practices under Banking Framework No. 3.0
– Level 5 (Digital bank 3.0): Leading: The ability of digital banking to meet global standards, continuously refined according to customers’ needs based on Banking Framework No. 3.0
Digital Banking Models in the World
– New Digital Bank (WeBank from Tencent, MyBank from Alibaba, TymeBank)
Aim to establish a new digital bank that separates and focuses on specific target market share with specific customer value positions through the establishment of a separate (digital) bank. This bank will have a separate operational model and architecture, minimally influenced by existing capacities. Usually launch with a limited service product (e.g. basic retail service, focus on deposits, payments or loans) and grow on the platform.
– Bank Digitization (City Bank, Commonwealth)
Building on the foundation of a unified channel strategy, supporting a consistent customer experience across channels. The unified digital bank will support interactions on multiple customer interaction points, record a lot of information, understand customers, and optimize and personalized interaction. This model also focuses on directing customers to a “digital first” operating model, minimizing physical interaction to the point of bringing value or mandating by state regulators on the basis of an operational model. straightforwardness.
– Combining the 2: Opening New Digital Bank + Digitalizing Traditional Banks
The aggregate approach of option (1) and (2) adopts the establishment of a new digital bank applied with a market share, positioning specific customer values, right at the time of construction. This option converts the bank’s current capacity to support a unified channel digitalization model. Both initiatives operate in parallel, ensuring optimal business value and time to market. The shared operational capabilities include the core banking system, the reporting architecture … while the customer outreach department of the two initiatives is very different.
Opportunities and challenges of Fintech
When all needs and matters are put on the Internet there are many advantages and risks
Opportunities of Fintech
With technology 4.0 combined with Fintech, it brings many advantages for the finance – banking industry:
- Serve the needs of consumers in the fastest and most convenient way, anytime and anywhere
- With space and time gap removed, a company does not need to invest in large infrastructure, but only needs to invest heavily in information technology to be able to access and serve the needs of everywhere. everywhere
- The benefits for banking and finance companies because the young Philippines population, most of them use smart mobile devices and computers, so the number of potential customers is always available.
- There are not many legal constraints, currently there is no legal or deeply regulated financial technology, so companies can freely operate their services without barriers.
- Supporting Philippines young people to start their business successfully, nowadays young people focus on start-up projects from information technology, especially Fintech.
Challenge of Fintech
The benefits are really beneficial, but besides that, there are many challenges and risks that people can hardly anticipate.
- Technology itself is the foundation so security issues run the risk of being leaked or stolen. Operating on the Internet platform should force Fintech to face “hackers” stealing information
- A current Fintech company, when established, faces a lot of competition and the current Fintech competition is very large, this is a lucrative market, every one who jumps in must anticipate this.
- It makes traditional operations units endangered and bankrupt
- Human resources are limited, so it is impossible to maximize the efficiency of financial technology at most 100%
- The loan market is chaotic, the risks of interest rates, liquidity, and bad debts are increasing because of the advantages of Fintech loan technologies.
- Competition in the loan market has increased rapidly, despite the law and the law in this area is still incomplete, so it is a disadvantage for both borrowers and lenders.
Is fintech a scam?
Inevitably, Fintech’s nature is good to support the increasingly developed and modern financial and banking sector, but everything has its two bright and dark sides and Fintech is no exception.
The bad side of Fintech in banking today:
- The risks in the Fintech payment membrane are very few, but the biggest problem is bank loans, personal loans, community loans, digital money … these are potentially risky for investors because Financial and banking fintech is targeting risky customer segments, loans without deposit insurance and lack of transparency.
- In addition to the risk for investors to lose money, borrowers using Fintech services also face the dangers of interest rates and non-transparent costs.
The reality shows that there are many fraud problems happening around Fintech today.
For example: In China after the collapse of Ezubao, statistics show that as many as 2,100 bank lending sites in China were warned, one of them was a scam and the investor is likely to lose all. money set.
For example: Modern Tech Joint Stock Company has defrauded more than US$666 million of investors, this company has mobilized capital labeled Singapore, India .. to issue shares but actually issue money number instead of issuing stocks as contracts.
How Fintech 4.0 affects banks
Up to this point, Fintech is very active and has a direct impact on the bank by bringing many new opportunities to the financial sector. Because of the strong development of finance, it has brought great risks to traditional banks.
- Previously, the bank was the largest and most reliable loan and financial advisory point, but now with the support of Fintech, financial companies have been born more and more, it overcomes all the limitations of Banks, all customers are affected when all services of the bank are financially one step ahead. So this is a great influence on the bank
- Payment services of banks: You are familiar with Fintech in payment using the Internet Banking application of the bank, but nowadays, not only banks can make money transfers and online payments, but also financial companies. , e-wallets or other industries can also create new, faster and more powerful payment applications.
So traditional banks either change or lose interest behind, forcing banks to work hard to follow Fintech to be able to win customers first.
List of Fintech companies in Philippines
2019 saw a boom for the Philippines’ digital payments space, where e-money transactions jumped to 36% to reach PHP 760 billion in value, the strongest rise across all payments transaction types.
E-money transactions growth surpassed credit card and debit card transactions, which rose by 18% and 15% to reach PHP 1,229 billion and PHP 451 billion, respectively.
For more information about fintech Philippines market and news, you can follow the news via https://fintechnews.ph/
Fintech company in loan application:
- Home Credit PH
- Tala
- Cashalo
- Digido
- MoneyCat
- Kviku
- CashMart PH
- Lendr
- First Circle
- FundKo
- Blend
- CashWagon PH
- PeraJet
- MoneyMatch
- Loan Ranger PH
- Lend PH
- EasyCash PH
- Asteria
- Kiva
- UpLoan
- UPFinance
- PawnHero
- Advance
- SeekCap
Hope through sharing about Fintech is what. All about Fintech in Philippines that we have just provided and shared above, people can better understand this financial technology to support their daily work and needs. Understanding knowledge helps consumers to be more convenient and quicker and at the same time they can grasp issues according to trends and needs of society.
