Fintech is driving digital adoption in PH

Fintech is driving digital adoption in PH

The pandemic has indeed accelerated digital transformation among Philippines companies as well as the adoption of digital services among Filipino consumers. Driven by work-from-home arrangements, distance learning, and social distancing, more Filipino consumers are buying and paying online and sending money electronically to others.

The improvements in the telco infrastructure bodes well with Filipinos increased appetite for digital services. In fact, we have seen perceptible improvements in mobile internet speeds at the start of 2021. In the latest Speedtest Global Index report of Ookla in January 2021, the internet download speeds in mobile and fixed broadband are 25.77mbps and 32.73mbps, respectively. These are big jumps from the August 2020 report, which pegged the mobile and fixed broadband internet speeds at 16.44mbps and 25.34mbps, respectively.

All these lead to the robust developments in the financial services sector, specifically in the consumption of digital financial services.


In a recent survey conducted in December 2020 by global analytics software firm FICO has revealed that 56 percent of Filipino consumers prefer to use digital channels to engage with their bank during financial hardship, while 12 percent used internet banking. This is encouraging considering that only 34.5 percent of Filipinos have an account with a financial institution and only 4.5 percent have a mobile money account, according to the Digital 2021 report of Hootsuite.

Much of the brisk activities in the financial services sector is driven by the financial technology (fintech) players, with their easy to onboard and signup digital financial services that are adopted by Filipinos with less effort and requirements.

This evidenced by the “over P1 trillion in transactions’ that “have passed through the GCash app during 2020,” which peaked at a P7.5 billion daily gross transaction value, and with more than 6 million transactions in a day. The mobile wallet fintech company of Globe also grew its users to 33 million, a 65 percent growth versus last year, according to Globe website.


The largest segment of services offered by fintechs is digital payments (e.g. digital wallets and peer-to-peer payments, investments) with a projected total transaction value of $15 billion in 2021, according to Statista. But there are other fintech players that disrupt main areas of the financial system, namely financing (e.g. crowdfunding, micro-loans and credit facilities), and insurance (e.g. risk management and microinsurance).; and other areas include surrounding services such as financial advisory and data security. These have spawned other portmanteau words such as bankingtech (banking technology), paytech (payment technology), weathtech (wealth management technology), insurtech (insurance technology), lendtech (lending technology), and even regtech (regulatory technology).

Fintech companies in the Philippines comprise 15 percent of the start-ups and is expected to grow its market value from about $5.7 billion in 2018 to $10.5 billion by 2022, according to Startup Genome’s Global Startup Ecosystem Report. These startups promise simplified access for customers via the Internet or mobile Apps, automated processing, reduction in costs, a stronger focus on customer service, more convenience, and higher transparency.


With the fast adoption of digital financial services in the country led by fintech, our country is on its way to truly solving the age-old problem of financial inclusion, with the ripening of the demand and supply sides.

On the demand-side, the market study of FICO shows more Filipinos prefer to use digital channels. The explosive growth in digital payments in 2020 also provide evidence that Filipinos are getting used to this mode.

On the supply side, the entry of “digital banks can help reduce the barriers that hinder financial access, such as the small and irregular income of clients, high transaction costs, geographical distance, and lack of proper documentation”, as the Bangko Sentral ng Pilipinas (BSP) averred.

“The Bangko Sentral ng Pilipinas in November 2020 approved a new license category for digital banks. The central bank has received two applications as of February — one from a new player and the other from an existing bank to convert into a digital bank,” as reported by S&P Global Market Intelligence.

The BSP will also “support a strategic awareness program to educate the public on the range of available digital financial products, their risks and the rights of consumers” the report further said. “The Philippine Identification System program using secure biometric data will help in the efficient delivery of digital financial services once it is operational”, and the “PhilSys program is expected to improve the authentication and integrity of digital banking services”.


Incumbent banks are taking advantage of these opportunities, by setting up their digital banking operations. But not be left out are competing fintech firms called neobanks. This is a type of direct bank that operates exclusively online without traditional physical branch networks.

For example, Tonik Digital Bank Inc. boasted as the Philippines’ first neobank, received a banking license in February 2020 as a rural bank and plans to launch its new digital banking platform by the end of the first quarter of 2021. South African neobank Tyme is preparing to launch services in the Philippines in partnership with JG Summit Holdings Inc.

Fintech are indeed gaining momentum in disrupting the financial services industry.

The author is CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at