GCash’s Martha Sazon believes that the fintech industry has an increasingly important role to play in helping Filipinos find new ways to connect, earn and grow.
This article is part of a Spotlight series on how brands can better connect with communities in the Philippines. Read more
Thanks to the COVID-19 pandemic, the Philippines imposed stricter measures and adopted the so-called enhanced community quarantine (ECQ) in March, wherein all establishments were forced to close except those providing essential services such as power and water utilities, supermarkets, hospitals and pharmacies, and banks. Even public transportation was halted, and the most marginalised groups were robbed of their livelihood due to limitations in people movement.
This has led to people losing opportunities to earn, as shops were forced to close or continue to operate with limited resources, cutting manpower and implementing cost efficiency measures. Many found themselves scrambling to find a source of livelihood and others becoming more creative in how to preserve their savings.
This shift to the new normal corresponds to the shift in attitudes, behaviours, and patterns of Filipino consumers. Filipinos now lean towards entrepreneurship, investments, saving, and many were seen pursuing self-development and their passions – prioritising self-preservation and employing survival techniques to be able to move forward despite lesser resources.
This change led to all sectors gravitating towards digitalisation and the online space. Online marketplaces have been more relevant and robust, populated by people who not only seek to earn during these tough times but also to socialise and build a community with fellow sellers and customers and improve their skills.
Amid the whirlwind of the online revolution, one industry has become the major foundation of the stay-at-home lifestyle, financial technology or fintech.
Fintech has become the bedrock of payments of products and services online and has enabled the movement of the economy in the new normal, bringing forth a whole new “Stay-At-Home Economy”. Mobile wallets are going beyond the notion of just another bank account to store money. It is now a wallet that enables users to do their everyday transactions with just a few clicks on their phones.
Digital finance binds together all products and services and provides Filipinos not only with greater convenience but also with safe avenues to transact with merchants.
People of all ages are now opening up to fintech, and the industry is growing at a rapid pace because of the dire need for digital payment solutions to keep the virus from spreading. Mobile wallets, being a frontrunner in growth and adoption of the masses, provided democratised access to financial tools and services such as savings, investments, credit, insurance, bank and peer-to-peer money transfers, and many others.
Fintech opened up greater opportunities for the masses to participate in the financial landscape. It managed to become an integral pathway for Filipino consumers to carry out their daily essentials but still staying safe while saving time, reaching people and communities regardless of location.
Interestingly, just when the lockdown limited movement and physical interaction, money has never reached this far before with fintechs allowing easy sending and receiving of funds. If you have a mobile number and phone, you can transact with anyone, at the comfort of your own home.
Digital payments also enabled merchants and sellers in navigating the new normal through leveraging safe contactless payment solutions such as QR codes or online links. This was a perfect gateway for social entrepreneurs and more established companies to digitise their businesses. Not only did digital payments help continue the economy amidst the lockdown, but also became a safer alternative by minimising cash handling.
The pandemic has also allowed many young professionals to be financial planners. Studies show that the younger generation is more worried about the effects the pandemic has to their finances. Fintech has provided easy access to financial services like savings, credit, investment and insurance - products that are normally hard to apply for. Now, they have a better way to manage their finances to help preserve and grow their hard-earned money.
Fintech has become a reliable partner of businesses and consumers, and of the government. The industry played a big role in moving billions of pesos of government funds to beneficiaries of the Social Amelioration Program. It provided both government and citizens a safe, secure, and quick avenue of efficient transactions despite the pandemic.
We have also seen trends of people exploring and identifying ways and means to benefit largely from fintech platforms and applications. Filipinos became more creative by offering fintech services, for a minimal fee, setting up businesses like community bayad centres (payment centres) and informal remittance agencies to send money to their loved ones anywhere nationwide.
With Filipinos being one of the most highly penetrated internet users in the world, the country is indeed ready and primed for a full swing adoption of digital solutions and financial services among its communities and the society to move forward in this pandemic.
However, the fintech industry alone will have a hard time creating a cashless society, given the country is still heavily unbanked. Fintechs must work together with both the private and public sectors, not just to educate the market on the convenience and safety of digital finance product offerings, but also provide users with services of better value. The goal is to create products that can make a real impact on their daily lives. To do this, we must continuously follow the growth of our customers in hopes of tailor fitting products based on their lifestyle.
Following the example of the fintech industry, brands of other industry sectors should also focus on unique opportunities being presented during these extraordinary times and really look at how these can enrich the lives of the newly adjusted Filipinos under the new normal.