JCCI Industry Briefing: A Forum on Fintech

By LA Montañez

Last March 11, 2021, the John Clements Industry Briefing Series continued with a topic that is quite important especially with the pandemic nowadays: Fintech. The main speaker was Winsley Bangit, Chief Customer Officer of Mynt (Globe). Kristian Melquiades, Country Director of Element, and Benedict Carandang, Vice President for External Relations of First Circle, joined him as panelists and reactors. Together via Zoom, all three shared their expertise in what Fintech looked like in the present and what they foresee in the future for this industry.

Winsley began by re-introducing GCash, the number one e-wallet in the Philippines that has grown by leaps and bounds in 2020, which is largely attributed to the pandemic. With contactless payment being a must, GCash became the app that citizens turned to in order to keep their money in easy-to-access places. GCash is now more integrated in Filipinos’ lives as compared to earlier years due to not having a higher level of need for contactless payment for utilities and bills, which has changed nowadays.

Not only this, GCash has also become the biggest financial aid to our government, having been able to support DSWD in their goal to provide financial aid to Filipinos badly affected by the pandemic.

However, as it goes, GCash is also a digital app. So it begged the question: is it safe to store money in an application which possibly contains more information than Facebook? A lot of businesses have partnered with GCash, aside from consumers. With all the money stored digitally, how does one know if it is secure?

According to Winsley, despite GCash being a digital application, they are regulated by the Bangko Sentral ng Pilipinas and thus, adhere to the strict protocols required for financial applications and institutions. This was confirmed by Mr. Melquiades and Mr. Carandang — by being a part of Element and First Circle respectively, they are also regulated by the SEC. It comes with the territory of being in the Fintech industry, especially since money is a sensitive issue all of us are very much aware of.

Mr. Kristian Melquiades then discussed more on how the Fintech industry is doing during the pandemic. What is most prominent here is that the lending sector is the most negatively impacted since the beginning, largely due to the lockdown which affected the jobs of Filipinos in this sector. The remittance sector remained neutral, despite the OFWs (the main source for remittance) having been on lockdown for the first few months of the pandemic.

The Fintech industry currently has 200 players, though Kristian has admitted that not all are profitable. With the Fintech industry’s sudden rise due to the pandemic, there were some challenges that needed to be addressed, the most prominent of which were internet connection (due to instability), education (not all Filipinos know what an e-wallet is, much less how to use it), and even talent (the lack of Data Scientists are suddenly a sore spot, being that this part of the education was barely touched on). For the lack of talent however, Union Bank has tried to address this issue by providing free training, and the Asian Institute of Management by offering a master’s degree in data science.

Benedict then discussed briefly how the Fintech industry will be able to help SouthEast Asia recover from Covid-19, reminding everyone that the lack of talent for Data Science means that there are a lot of opportunities for Fintechs. Since SMEs rely mostly on the flow of the economy, Fintechs help by getting them the funding they need. What sets First Circle apart from other Fintechs is that they have no collateral, lessening the burden they have on SMEs.

Overall, despite the challenges that the Fintech industry is still facing, they are looking to have continuous growth in the next few years, due to the growing demand in the digital space. This would be quite attainable, as they believe that “At the heart of FinTech is Digital Transformation”.

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About the author:

LA is an anime and k-drama fan, considering herself to be somewhat an otaku to both. She enjoys watching anime and k-dramas when she has the time, but is also a self-proclaimed frustrated writer, having written stories whenever she feels like it. Due to mostly her love for anime, she can speak a bit of Nihongo, and can understand a bit of Korean as well. This woman’s dream is to be able to visit other countries, and first on her itinerary would be — you guessed right — Japan and Korea.