Financial Technology (FinTech) should be viewed as a complement rather than a threat to local banks according to HSBC Philippines President and CEO Jose Arnulfo "Wick" Veloso.
Although the emergence of FinTech has put a pressure on banks in terms of delivery of financial services, President Valeso said that this innovation will lead to an evolution of the local banking industry.
Banks and FinTech Companies
The HSBC CEO also added that both banks and FinTech companies have a lot to offer with each other, with banks having its large customer base, stable infrastructure, assets and regulatory know-how, and FinTech companies or start-ups having its out-of-the-box thinking, technical expertise, and agility in adapting to the ever-changing environment of technology.
According to Veloso, FinTech companies and start-ups shouldn't be considered as a 'disruptive force' but rather a new rival in the delivery of financial services.
“Fintech complements rather than threatens banking institutions. In my experience, banking has always been about technology, so today’s financial-technology innovation boom represents evolution rather than revolution for traditional banking. It is supplementing and diversifying the existing financial system – not replacing or disrupting it,” he remarked.
Just like FinTech companies and start-ups, CIC complements and further elevates the quality of service being offered by the local banking industry through its credit information system (CIS) which will be able to produce credit reports beginning January 2018.
Importance of Credit Report
A credit report is a document that contains basic credit information on a borrower from which banks and other lending institutions may gauge the creditworthiness of the individual or institution that wishes to borrow money from them.
While FinTech companies and start-ups will be able to provide local banks with innovative ways of distributing their financial products and services, credit reports from the CIC will help banks and other lending institutions evaluate borrowers through their credit report which would be cost-effective and time-wise.