FPH x Smile API May Mixer: Shaping Fintech To A Consent-Driven Future

On May 31, 2024, the Fintech Philippine Association (FPH) partnered with Smile API to host the highly-anticipated FPH May Mixer, which was held at the SGV 1, Washington SyCip Development Center (WSDC) in Makati City. The event was moderated by Arvie De Vera, a founding member of the Fintech Philippines Association. The event brought together prominent figures from the local fintech industry to discuss key issues and emerging trends.

This year’s May Mixer was made possible through the partnership of Fintech Philippines Association and Smile API, a fintech company known for providing real-time, verified, and user-consented employment data for financial institutions and HR departments. The event featured a distinguished panel of industry leaders who shared their insights on financial literacy, the role of rural banks, consumer trust, and data privacy. 

During the discussion, National Privacy Commission’s Deputy Commissioner Atty. Leandro Aguirre emphasized the crucial role of data privacy and the need for consent-driven data management. He stated, "If we hear about you, then you're not exactly doing a great job. If you're successful, it means the customer trusts you. The moment we hear about you, something's gone wrong." 

Aguirre also highlighted the responsibility of companies to educate and empower individuals about their data rights, ensuring transparency and trust between both parties.

Rafael Amparo shared valuable insights on the role of rural banks in achieving financial inclusion. He highlighted the significance of developing strong relationships to better understand and serve rural communities. 

Rural banks, he noted, act as vital links between rural communities and government initiatives, with him saying “Results have been moderate, but we did this with them (pertaining to government institutions). Ties with the government are a lot deeper than what people would believe.” while discussing how DTI’s partnership with the International Fund for Agricultural Development (IFAD) has provided local MSMEs with secured funding needed to grow their businesses

Amparo further discusses the massive potential of neobanks in the Philippine market, noting their ability to leverage technology and extend financial services to underserved communities like the rural areas. 

He also pointed out that only few financial institutions can match the reach and understanding of rural banks, making them crucial for achieving financial inclusion. The rise of neobanks presents a challenge to traditional financial institutions, highlighting the need to expand their scope of service and create partnerships with government agencies & other institutions to effectively reach these markets.

“There are places that don't exist from a banking perspective, yet we do know that a lot of these business owners are creating economies here.”
- Marius Mare on rural businesses and their economies

Sybrin’s Marius Mare was also able to share his experiences from working in South Africa, where he highlighted the importance of tracking business activities in rural areas to which they plan to integrate them into the broader financial system to give them more opportunities. 

Mare emphasized that there is a need for reliable data sources in the country and advocated for improved methodologies & accuracy on data gathering, including enhancements in government data systems.

The discussion also featured Christian Lauron talking about the critical role of proper data handling to achieve financial inclusion. 

When discussing credit score assessments, Lauron states that “... models should be designed to allocate amounts rather than come up with a score for these types of customers”. He addresses the need for financial institutions to utilize various types of data to determine how much rural business owners can borrow aside from basing on credit scores. 

This approach helps address their lack of access to financial products, which is essential for building and improving their credit scores. He explained that different types of data must be managed correctly to enable financial institutions to make informed credit decisions & create accurate consumer profiles. Lauron also stressed that in order to build successful data privacy practices, it should be deeply embedded in a company's culture & beyond mere compliance with checklists.

Future Outlook and Industry Impact

The panel discussions at the May Mixer were able to highlight pressing issues in the Philippine fintech landscape, particularly concerning data privacy, verified data availability, and data acquisition. The event underscored the importance of collaborative efforts between the government, financial institutions, and fintech companies to make data more accessible and secure.

These insightful conversations were able to set the stage for future innovations and improvements in the local fintech sector. With partnerships & institutions working on building public trust in the financial services they provide, the future promises greater financial inclusion and security for Filipinos.