The Philippines has made plenty of progress in promoting financial inclusion, and this is supported by the 2017 data from the Bangko Sentral ng Pilipinas which shows improvement in financial literacy and awareness among Filipinos. But opportunities for providing even greater access to financial products still abound.
And according to Annica Witschard, CEO of Prague-based consumer finance company Home Credit Philippines, there is one factor which she believes can help promote better financial inclusion in the country.
“Technology gives us a lot of leverage in improving financial inclusion in the Philippines,” said Witschard. “We can, and we have been utilizing it to speed up, increase and generally improve Filipinos’ access to financial tools—especially those who are unbanked or previously excluded by the financial system.”
Over a third or 36 percent of Filipino adults think that obtaining a loan from formal financial institutions is not accessible to them because of lack of documentary requirements.*
“This is one area that technology can address,” noted Witschard. “Home Credit, for example, has found an innovative way of underwriting and risk management to provide alternative financing options even for customers with zero credit history. On top of that, we do it at a speed that had been unheard of in the traditional finance industry; and we have technology once again to thank for it.”
“This is just the tip of the iceberg though,” Witschard continued. “Technology can be used as a gateway to open these options to these people, but they also play a major role in supporting the products and services. For example, knowing your loan details through mobile apps, SMS notifications, and online application of financial products are hugely important in a country with a high rate of mobile phone and internet usage as the Philippines. And they help to make financing even more inclusive.”
Witschard added that financial inclusion goes hand in hand with financial literacy, and with that comes the need to understand and embrace the technology. “The BSP data says that only 18 percent of Filipino adults use their bank accounts for payments because of concerns on availability, distance, and trust. I think we need to help consumers understand that technology can be trusted when it comes to making financial transactions.”
“Near-instant” approval time
“Without a doubt, we see technology as a cornerstone of our business; it helps us become even better at we do, which means being able to serve customers better. We were able to speed up our application approval time from ten minutes to near-instant approval, with majority of customers approved within one minute of submission of their loan application. We have shifted our documentation to paperless which saves us time, manpower, not to mention provide ease to our customers. We are also beefing up our eKYC methods with features such as facial recognition. And all these are aimed at making the customer experience even better than before,” Witschard said.
“At the end of the day, that is why we are using, and continuing to improve on, all of this technology: because it can empower and improve the lives of people.”
*Bangko Sentral ng Pilipinas, Financial Inclusion Survey, 2017
