“Finbiosis” is the future of digital financial services
“Finbiosis” is the future of digital financial services30 October, 2017 •
Lito Villanueva, Managing Director and CEO of Philippines digital financial solutions provider, FINTQ, shares his views on collaboration to further the goal of financial inclusion and the company’s new micro deposits offer.
FINTQ has been successful in forming partnerships with banks. What lessons have you learnt about creating viable partnerships and encouraging traditional financial service providers to adopt a digital approach?
One great lesson here is that a digital partnership is key in enabling both banks and non-banks to empower the consumers. FINTQ has been successful in changing the mind-set that fintech players are disrupting the ecosystem, that we are here to “eat their lunch” – rather we are here “to serve their lunch.”
Fintech companies aim to build robust, efficient and sustainable ecosystems and both types of entities can leverage each other’s strengths. I call it “finbiosis” or financial symbiosis. Further, because FINTQ has been successful in showcasing, in the present world, what the future would become, the banking, financial services and insurance sector in the Philippines has embraced digital transformation.
You have an interest in promoting financial inclusion; how does FINTQ ensure that its products:
a. Meet the needs of the unserved or underserved?
b. Are designed to ensure sustained use?
a. FINTQ has been an advocate for, and a steady development partner of the Philippines regulator in, deploying digital financial innovations. Our aspiration is to use mobile technology to level the playing field, while promoting greater access to finance for the mass market, especially those in the bottom of the pyramid. With a focus on customer-centric, demand-driven and mobile-first digital financial innovations, it has achieved this by engaging regulators, enabling enterprises and empowering individuals with, what I consider to be, an awesome consumer experience.
b. To ensure uptake and scale, we make it a point that all our digital financial services are simple. Simple enough for an ordinary person to understand how to use it and how it would benefit him/her.
According to the 2017 Brookings Financial and Digital Inclusion Project, Philippines leads Asia when it comes to financial inclusion. The country received its highest scores of 100% in the country commitment and regulatory environment categories and, although it scored 94% in terms of mobile capacity, it only received 42% in the area of adoption. It’s all about poor adoption by the target market. While we strive to make the product proposition simple, we also need to focus on creating the perfect balance between convenience and control. Consumers adopt not only because they find products convenient; we have found they value control over convenience.
What role does data play in product design and customer targeting?
a. Do the partners that adopt your products have the same access to this data?
b. What is your biggest data-related challenge/pain-point?
Data plays a critical role in ensuring more targeted and consumer-centric product offerings.
a. Yes they do, but this is limited to those consumers that relate to them. In addition, we provide the overall data insights to guide them in the behaviour or nuances of the consumers.
b. Ensuring that we comply with all the laws and regulations, specifically on data privacy.
2017 has been a busy year in terms of innovation and launching new products. Which product offerings are showing the best early signs of success and which are you most excited about?
This year alone, we received five accolades – that makes it 36 we have won in the past three years! I believe we are now regarded as the most awarded fintech start-up in the world and we have the most extensive digital footprint in the Philippines – covering 100% of 81 provinces, 91% of our 145 cities and 26% of 1,490 municipalities. This is what Lendr, our digital lending solution, has generated for us. Around 8 out of 10 borrowers are from outside of the main urban centres, 26% of whom are from low-income locations. It is also worth highlighting that 47% of online loan applications were done outside traditional banking hours.
Lendr has already disbursed close to US$500 million through over 70 bank and non-bank partners. It is the only digital lending marketplace approved by the national regulator to use a community cloud to enable it to scale quickly.
FINTQ may be the only fintech company in the world that has the complete suite of digital financial services spanning from credit to savings, investment, insurance and lay-away payments. The regulator has granted our request for approval for Lendr to act as credit-scoring aggregator.
We are also looking forward to receiving approvals on pioneering innovations such as agent banking for micro-deposits, digital micro-investments and a micro-insurance offering. These micro-deposits could be as low as 19 US cents – no bank in the country will ever cater for deposits at that level!
Given our extensive partnerships with local government units, non-government organisations, co-operatives, microfinance institutions and community organisations, we aim to cover over 30 million Filipinos (about 44% of the total adult population) in their use of these digital financial services in the next three years.
Which other product, player or innovation are you watching?
Eventually, we will make a strong play with blockchain and cryptocurrency.
Lito Villanueva (the only Filipino included in the Top 1000 FinTech Leaders in Asia) started his career at the Economist Intelligence Unit, Philippines. He has also worked for the Land Bank of the Philippines, as a consultant to the IFC-World Bank on mobile remittances and at VISA as the Lead: Customer Strategy and Market Activation, Global Mobile Money. In addition to leading FINTQ, he currently serves as Managing Director for Financial Technologies, Digital Inclusion and Alliances at Voyager Innovations and has recently been elected the founding Chairman of FintechAlliance.