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"Fintech ignores the brick-and-mortar facilities of banks and minimizes the intervention of humans."


The last half decade has been a crucial time in Lito Villanueva’s life.

He became enamored with fintech (financial technology)—the employment of software and engineering knowhow to enable banks, financial intermediaries, and so-called non-banks to offer lending and other financial services to people who need it most but don’t have access to it.

In banking, those who have already the money are the ones offered more money. Bankers, after all, are fair-weather friends. They lend you an umbrella when the weather is fine and take it away when the skies become cloudy and it starts to rain.

Such “good banking” practice has meant the vast majority of people, especially in Third World countries, do not have access to banks and their much-desired services.

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The solution, then? Well, ignore the banks. Do not use their branches. Instead avoid them, as well as their tellers, their tedious and cumbersome “know your client” (KYC) rigmarole. Often, clients endure nonsense for very little money.

Fintech ignores the brick-and-mortar facilities of banks and minimizes the intervention of humans. The result is speed, efficiency, lower cost, and more people having access to money, with minimum of fuss. It is a great help to small people, the masses (seven of every 10 Filipinos who have no access to banks), and SMEs—small and medium enterprises which comprise 99 percent of firms in the Philippines.

The fintech market is huge. Of some 1,634 cities and towns, only 1,101 (67.4 percent) have a bank, leaving 533 towns and cities without a bank presence. Imagine a city or town without a bank. Jesse James would go out of business.

In the Philippines, people who receive a remittance from relatives in Manila or abroad, have to spend from P50 to P200 to go to the nearest town where there is a bank to receive that money.

Fortunately for the 533 bank-less towns and cities, 465 of them have what is called access points—which can be an offsite ATM machine, a pawnshop, a money lender, a courier service, a microfinance NGO, an e-money agent, and very soon any branch of 7-11, McDonald’s and Jollibee or such establishments with a huge chain and nationwide network. A big help is having a cellphone because with an iPhone or Android device, cash can be sent and received—wirelessly, seamlessly, without human intervention.

If you are serious about your money or you have a business, you might still need a bank. There are 12,378 banks (head office, branches and other offices), up 4.1 percent from a year ago. There are 21,679 ATMs, up 5.4 percent.

Notable are the faster-growing branch-lite units of banks, 1,892, up 12 percent from a year ago. Cities and towns with branch-lite number 796, up 9.3 percent, while cities and towns without a regular bank branch but with a branch-lite number 169, up 11.9 percent. From zero in March 2018, there are now 7,816 cash agents—people or firms allowed to handle or dispense cash by the central bank. Significant is the growth in microfinance NGOs—up 9.9 percent, to 2,861.

Such growth may be attributed to the work of people like Lito Villanueva. He has organized the group into what is now the Fintech Alliance—a kind of bankers association for non-bankers. is the premier organization of leading digital companies who together have over 80 percent of FinTech-initiated transaction volume.

Fintech is actually disruptive banking. It has made the big banks more nimble, aggressive, innovative. Their business, after all, is being threatened.

Reacting to the threat the banks are joining the fun. They have organized their own fintech units, lowered their charges and fees, are now more responsive to client needs, are now more relevant.

One bank, Union Bank, has put up its own software fintech engineering unit with some 200 of the best and brightest in fintech on board. Union Bank is also issuing its own digital or crypto currency—the first local bank to do so and to be so authorized by the central bank. Union Bank President Edwin Bautista calls the initiative digitalization. Union Bank, in fact, is the country’s first digital bank.

Meanwhile, in five years, Villanueva has paved the way for financial symbiosis (“finbiosis”). He first initiated a strategic collaboration with over 40 incumbents to offer digital lending, leveraging each other’s strengths, thereby creating a whole new ecosystem of alternate or virtual banking. 

Villanueva started in the FinTech business as the managing director of FINTQnologies under the PLDT Group. He is among the pioneers that started Voyager Innovations and PayMaya. Last 2018, Voyager sealed a US$225 million-investment from Kohlberg Kravis Roberts & Co. (KKR), Tencent Holdings, International Finance Corp. (IFC), and IFC Emerging Asia. To date, it is the largest sum invested into a Philippine tech company. 

Lito is the first and only Filipino in the Top 100 FinTech Leaders in Asia.

A “FinTech evangelist,” Villanueva is the president of the BSP Governor Nestor A. Espenilla Jr. Institute for Growth towards National Inclusion, Transformation, and Empowerment (IGNITE).

Among Lito’s initiatives:

• “Uncharted Beyond: The FinTech Taxonomy of the Philippines,” the first jungle guidebook of FinTech practitioners in the country. He identifies six dimensions in classifying FinTechs: 1) dominant technology component, 2) value proposition, 3) delivery channel, 4) customers, 5) revenue stream, and 6) product or service offered. Delving deeper, he introduced five FinTech categories in the Philippines. These are 1) payments and remittance services, 2) crowdfunding, 3) lending platforms, 4) alternative trading venue, and 5) insurance and asset management.

• Alliance Code of Ethics. Fees and interest rates must be fair, reasonable, and transparent. All members, at all times, must protect the consumer’s right to confidentiality.

• TechnoEthics, a white paper on discovering the ethical use of technology, protecting against the misuse of technology, and delivering common principles to guide new advances in technological development and application to benefit society.

• INDX: Inclusion and Digital Transformation, an annual FinTech Alliance Summit held at the Bangko Sentral ng Pilipinas attended by various stakeholders.

• FIRST: Fintech Identity Registry Sharing Tool, the Philippines’s first shared electronic Know Your Customer (eKYC) national registry initiative to reduce the burden of producing KYC documents.

• ASEAN-wide implementation Quick Response (QR) code for payment for greater interoperability promoting efficiency, security and consumer convenience among consumers.

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