Filipinos fintechs need to get creative to be competitive

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Once siloed among only the most extreme enthusiasts, the local cryptocurrency craze is going nationwide, grabbing the attention of even those at the highest level of government.

Earlier this month, the Cagayan Economic Zone Authority (CEZA) announced plans to build a “Crypto Valley of Asia” in the Cagayan Special Economic Zone, which will serve as a hub for both cryptocurrency and fintech companies.

The CEZA initiative — in collaboration with Northern Star Gaming and Resorts — is set to host 25 crypto and fintech companies, with the hopes that an influx of IT firms will revitalize the area, create jobs, and improve the local and national economy.

The government has already tapped a number of international companies willing to relocate to the Cagayan region. But more than simply bringing global firms to the Philippines, this project presents a unique opportunity for one (or more!) homegrown groups to take the global stage.

In addition to contributing to the economic resurgence of the Cagayan Special Economic Zone, the message this would send would be clear: We can stand shoulder-to-shoulder with the most cutting-edge firms in the region, if not the world.

Southeast Asia is full of great examples of how creative startups are riding the fintech wave. If local founders hope to stay competitive, they’re going to have to start taking notes. Here are three examples to get you inspired:

Pundi X — The popularizer

Most cryptocurrencies have leaped forward in popularity purely based on speculation. People buy the tokens that they think will rise in value, praying it one day does. Cryptocurrencies are thus to this point almost a misnomer. Outside of a small minority of ecommerce sites, there’s still no meaningful place for consumers to use them as an actual currency.

Pundi X, a tech company from Indonesia, is working to change that. They produce blockchain-based, point-of-sale systems that enable consumers to transact with cryptocurrencies in offline settings.

The company is currently rolling out 100,000 of the Pundi XPOS and will celebrate a major milestone next month, when it powers Ultra Taiwan 2018, making the EDM music festival the first in the world powered by blockchain.

At the festival, users will be able to used Ultracoin to purchase items from 35 different vendors, outfitted with Pundi XPOS terminals. That Pundi X is set to facilitate transactions from over 30,000 attendees over Sept. 8 and 9, just goes to show the power of being a digital enabler.

In much the same way, rather than adding yet another token in the mix, Filipino founders might want to start thinking of ways to help people use them.

SmartKarma — The enricher

As fintech in the Philippines is still relatively young, many people still make the mistake of assuming that fintech is a field that specializes in new ways to access and store money (e.g. digital wallets).

In truth, an important function of fintech is to not just help us store funds, but generate wealth.

Singaporean company SmartKarma provides institutional investors around the world with market research, enabling them to make smarter investment decisions. As part of a larger field of advisory services towards wealth-generation, SmartKarma represents a new way to empower people.

Similar services have even started developing robo-advisory platforms. As the name suggests, these are AI-based platforms that help users make better investments.

With such a robust financial literacy industry, chock-full of of seminars, workshops, and courses, wouldn’t the Philippines benefit from a fintech complementing that drive? Filipino founders should think beyond the digital wallet, and like SmartKarma, conceptualize solutions around wealth generation.

Dropfoods — The bridger

In the parlance of tech journalism, Dropfoods has been variously classified as both fintech and as retailtech. And that dual label is fitting. Dropfoods bridges the worlds of both fintech and traditional retail through its mobile app and smart vending machines.

Based out of Vietnam, Dropfoods operates 40 vending machines across the country, powered by mobile wallets. Consumers can pay for items they want out of the machine by accessing it with their phones and paying through an app.

Dropfoods takes the convenience of a traditional vending machine, and takes it a step further by removing the need for cash altogether. The company aims to expand with an even wider national rollout next year.

Filipino founders ought to look to Dropfoods for inspiration, especially given that Vietnam’s market is arguably the most similar in ASEAN to that of the Philippines.

Like Dropfoods, local founders should also try to bridge fin-tech into adjacent industries to create value for multiple stakeholders.


Ma. Flordelin Ensomo is a Certified Public Accountant. She currently works as an Audit Associate at SGV and Co.