The Future Of FinTech: Open Banking Coming To The Philippines
Financial Technology is relatively new in South East Asia, but there is a Boom coming in the FinTech space. The Philippines, Indonesia and Vietnam are markets that are attracting a lot of international attention for their growth projections and potential return on investment. Following trends from the power house economies of the world, the Philippines in particular is learning fast from Australia, Europe and America. What has worked overseas will work in the Philippines and one of the new technologies is Open Banking.
There are only a few companies offering Open Banking in the Philippines today. Brankas, Kontomatik and Salt Edge are currently offering lending companies the insights of their Open Banking Solutions so they can help lenders make better and faster decisions. They can help customers get affordable loans faster, and we can move even further away from the manual processing of loan applications, the paper-based banking practices and the old fashioned in-branch activities of managing check books and printing off bank statements.
With the emergence of GCash, PayMaya, Coins, Lazada Wallets and GrabCash it is clear that online financial transactions are growing, and people are becoming more accustomed to the processes. Money remittances are still very common, but now can be done by a touch of a key pad, bank accounts can be monitored online, payments made for groceries and bills paid for home entertainment, the FinTech revolution is starting in Smart Phones and from the homes of Filipinos around the country.
There are still a lot of hurdles to overcome. If you do not go to your specific branch, there is still a P100 charge for encashment of checks, if you have insufficient funds and fall below the holding balance, there are charges and fees applied to your bank account, if you send or receive money from overseas workers, the fees are even bigger. Some people see this as a risk, others as an opportunity.
This opportunity is where the true FinTech revolution will begin.
A revolution tries to force change, fights against the controlling forces and shows people that different is nothing to be scared of. Open Banking is a new revolution in FinTech and will pave the way for financial inclusion, financial literacy and financial improvement.
So what is it?
Open banking is a secure way to provide third-party FinTech companies with access to financial data and products, enabling them to build new applications and services. Examples include reputable online lenders giving you a loan that you can afford quickly, check out services at online market places, so you can buy goods that you can afford, and banks providing credit cards and providing score cards that enable them to give you products that you need.
It is really very simple, with read-only access to your bank statement, companies can make decisions in real-time about how much to lend you, what credit to give you and what you can afford to buy. If you only borrow what you can afford to pay back, this stops the negative cycle of debt that can be caused by over-spending, over-borrowing, or by getting into too much debt with multiple companies.
It is heavily regulated, and works in the online lending space in the US and European markets where regulation comes from the highest of banks. It is totally transparent so everyone knows exactly what is going on and can work together to benefit you, the customer. It is completely safe, so you remain in control of your banking passwords and data.
In the Philippines not everyone has a bank account (Current figures put the banked population at around 40%) but everyone has a Smart Phone (around 120% of the population). Combining Smart Phone technology with banking technology will bring the banked population up, whilst also ensuring that people have more access to the best products and services on the market.
There is absolutely no point in driving people into debt, it is negative to the growth of the economy. There is every reason to give people more financial education, products and services so they can ease themselves out of debt, and into a better way of life.
Open Banking Technology puts the customer in control of their finances, and makes loans and credit readily available to anyone with a Smart Phone. Online payments become faster, Direct Debits means that you do not need to stand in long lines in banks to pay your bills on time, automated debits mean that you do not have to do anything, pre-approved amounts are paid on pre-arranged dates, without you having to do anything and it is all controlled from your phone, by logging into your account.
You can top up your load. Pay your bills. Loan money. Buy products. Pay for services. Top up your e-Wallet. Get paid, send money, help out family and friends, send gifts and pay people for work. Everything at the touch of a button.
Open Banking. Your future, today.
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