In 2016, it was reported in a World Bank post, that 264 million adults do not use banks in South Eastern Asia. Services are scarce in some areas and t
In 2016, it was reported in a World Bank post, that 264 million adults do not use banks in South Eastern Asia. Services are scarce in some areas and the old habit of storing money under a mattress is still going on. Unfortunately, as credit is hard to source in these remote regions, some have fallen prey to loan sharks making high-interest repayments.
This has motivated the formation of a Fintech partnership between the Philippines and Hong Kong with the goal of making banking services available. The Philippine companies of JG Summit Holdings and the Hong Kong company Oriente are the creators of this partnership. The aim is that by 2020, the number of adults banking will increase from 50% to 70% in South Eastern Nations.
The Fintech partnership hopes to offer such services as loans for school fees and unexpected medical costs. Research from the Manila Bulletin, the Philippines central bank, the BangkoSentral ng Pilipinas (BSP) reported that 86% of Filipino households do not use banks and therefore don’t use deposit accounts simply because they are unable to save. There could be an uphill battle facing this new partnership as many who took part in surveys have clearly stated that they do not trust banks or financial institutions.
There is another aspect to why the Fintech partnership may find it difficult to break into this market. Given that the Philippines is the third largest payments receiver in the world, with nearly $30 billion going into the country last year, it is offering a unique opportunity for the growing use of bitcoins. Bitcoin is understood to be a cheaper and faster alternative compared to normal payment routes. Not only have they created a Token Hub Asia in the Philippines, but they have also provided a Bitcoin ATM in the center of Manila’s financial region. The Token Hub Asia is a service for altcoin Eternal Coin of XEC to send funds directly to a mobile. Serving the Philippines, Japan, Hong Kong, and Korea it looks like it is set up for growth.
The term Fintech is used to describe a new financial industry that applies technology to improve financial activities,’ according to Wikipedia, and, it is a fully automated service. With such rapid technology growth, the financial industry is potentially able to offer their services to areas of the world where previously it would have seemed very difficult. Fintech financial technology hubs in 2015 were opened in Sydney and Hong Kong where huge investment is planned to be spent during a five-year period up to 2020. It will be an interesting time to follow the new Fintech partnership between Hong Kong and the Philippines to see how the local populations will react.