Connect with us

Hi, what are you looking for?

News

Enabling a financially inclusive future

With more Filipinos onboarded to the formal financial system, goods and services must be properly designed to allow for greater participation 

Financial inclusion allows everyone to access a wide range of financial services. Access is defined by availability and how products and services respond to various needs.

From starting a business, buying a house, or planning for retirement, financial inclusion helps achieve broader aspirations in life. By helping people and businesses gain financial control, financial inclusion can spur sustainable development for more Filipinos nationwide.

Addressing local challenges towards financial inclusion

Despite steps taken towards greater financial inclusion, exclusion continues to disproportionately affect many Filipinos. In a survey by the Bangko Sentral ng Pilipinas (BSP) in 2019, over 51 million Filipinos were unbanked. As formal lenders tend to reject consumers due to lack of information, 44% of the unbanked population have to rely on non-bank sources for loans.

In response, the rise of digital banking creates more opportunities for financial inclusion. At a media briefing, the BSP cited an increase in basic deposit accounts plus the activation of e-wallet services resulted in around 20 million Filipinos onboarded to the formal financial system between 2020 and Q3 of 2021 — bringing the number of “banked” Filipino adults to around 41 million.

With digital transactions rising, connectivity is crucial to realize the potential of digital financial services. Poor internet access and infrastructure will only hinder advances. A lack of awareness is also among reasons why Filipinos forego financial services. While the BSP survey showed 7 out of 10 unbanked adults own mobile phones, lack of knowledge on mobile financial services and a preference for in-bank transactions stood as barriers against online financial transactions.

To deepen trust in digital financial institutions, the government must continue to work with the private sector for financial literacy programs and digital skills-building to boost access. Financial institutions and other businesses must help increase general awareness.

Good credit scoring for better financial flexibility

For greater access to financial goods and services, a good credit score is key. Based on increased insights on a person’s credit history, credit scores help lenders assess a person’s financial risk — enabling customers to receive better terms on credit cards, housing loans, and insurance.

Leveraging technology and innovation, and backed by stalwarts of the local banking industry, TransUnion Philippines was established in 2011 to make trust possible between consumers and businesses. As the first international private credit bureau in the country, TransUnion uses alternative data where traditional data from financial institutions isn’t available to give financially ‘invisible’ Filipinos a traditional credit score. Spanning mobile phone and device data, alternative data provides additional insight on an applicant’s credit worthiness.

Alongside credit information campaigns, TransUnion utilizes information to unlock credit opportunities for Filipinos. For businesses, the updated CreditVision Link Universal Score and Custom Scorecards leverage credit and alternative credit data to enhance risk decisions and understand consumer trajectory, while digital onboarding technology simplifies processes to increase acquisitions while safeguarding against fraud.

Other risk management solutions include credit reports that integrate data from Philippine financial institutions for complete views of consumer credit history, an income estimator for precise consumer targeting, and triggers which monitor customer behavioral changes to identify opportunities and limit risks – enabling businesses to manage portfolios more effectively. With these measures, more Filipino consumers become credit visible as lenders and businesses possess comprehensive assessments of financial behavior.

With the Philippines moving towards post-pandemic times, the financial market must be more inclusive. By empowering individuals to become financially visible by providing institutions with information and insights to comprehensively assess risk, people can act as a catalyst for the economy, benefiting the country while unlocking a better quality of life for themselves and their families.

Pia Arellano has over 25 years of industry experience across banking, payment solutions, telecommunications, and remittance services. She has been instrumental in establishing TransUnion as a risk management and data solutions and insights partner of banks and financial institutions in the Philippines.

Email questions to tuphcomms@transunion.com.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Financial Advisors

The solar PV module market so far has seen commendable growth, with numerous milestones having been achieved in terms of the number of installations,...

News

KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

News

The Cabinet under the next administration is bringing in experienced officials who will be at the forefront of managing and planning the Philippine economy....

News

REUTERS MUMBAI/BUENOS AIRES/LONDON — It only took 24 hours last month for Prime Minister Narendra Modi’s government in India — the world’s second-largest producer...

News

UNSPLASH YAMAGATA, Japan — Japanese farmer Kiyoharu Hirao has started to add more rice to the mix he gives his cattle in order to...

Editor’s Pick

The Institute of Directors has had to investigate allegations about how the lobby group is run. The investigation comes just four years after Lady...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Financial Advisors

The healthcare ecosystem is one that has thrived on the cusp of scientific progress, benefitting enormously from the winds of change in the technological...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.