The Philippine fintech sector faces several hurdles that hinder its progress, including the absence of a centralized database, reliance on outdated technology, and industry-specific barriers.
These challenges were highlighted by Nasim Aliev, co-founder and co-CEO of Skyro, a fast-growing fintech provider in the Philippines, during the FiNext Conference in Dubai on February 28, 2024.
Nasim noted that with over 20 different types of Philippine IDs, each serving different purposes, Filipinos face difficulties in accessing the financial services they urgently need.
This poses a significant problem for fintech businesses, as it hinders cross-referencing information and customer data verification, increasing reliance on biometric measures.
To overcome these challenges and quickly expand its services to over 500,000 customers by year-end, Skyro employs advanced global technologies based on big data, generative AI, machine learning, and other external data to generate scores that help people access financing. This, combined with advanced risk management models, allows Skyro to minimize risks and generate a positive net present value (NPV).
Skyro is also developing a robust and accurate credit scoring model that leverages data exchange with external sources to address industry data challenges. Partner companies are engaging with Skyro to build a more sustainable fintech landscape in the country.
Despite these challenges, Nasim believes the Philippines’ fintech landscape offers significant opportunities for growth and innovation.
With half of the Philippines’ population belonging to the 24 and below age group, Skyro projects increased demand for financial services for this demographic in the next 10 years, with about 20 million young people moving up in their careers and wealth, further magnifying the demand for diverse financial services.
The co-founder of Skyro also identified an untapped market for lending firms to penetrate, providing responsible lending services to the upper middle and affluent classes.
This market segment bridges the gap between banks that offer low yearly interest for affluent customer segments but are inaccessible for less affluent Filipinos and loan sharks and predatory lenders with high interest rates that prey on middle and lower-income segments.
Nasim emphasized the importance of gaining consumer trust, citing Skyro’s 94% regional penetration in the Philippines, covering 16 regions, 76 municipalities, and 139 cities, and establishing 2,500 point-of-sale (POS) locations. Through understanding the culture and masterful entrepreneurship, Skyro has achieved an average of 50% compound monthly growth rate in under a year.
“We have discovered that culture plays a vital role in the success of an organization operating in a difficult international market such as the Philippines. By fostering a culture of empowerment within the company, we at Skyro prioritize gathering authentic insights from our Filipino colleagues to craft solutions tailored to local culture, ensuring their relevance and effectiveness in the Philippine market alongside global standards. Data science, technology, testing, and evolution are essential for understanding the market, driving change, and maximizing entrepreneurship,” Nasim remarked.
Nasim concluded by mentioning the Butterfly Effect, a concept that reflects Skyro’s journey from a small organization to a significant market player, emphasizing how its continuous efforts contribute to driving a bigger purpose.
“We started as a small organization, but we have made a significant impact on the market. Our primary objective is to enhance transparency and efficiency and reduce the amount of asymmetric information available. We do not work for our benefit but aim to increase competition and contribute to the social and economic development of the country,” he closed.
The FiNext Conference & Expo is a digital hub that brings together tech start-ups, SMEs, incumbent tech providers, investors, institutions, and other stakeholders to interact and connect in one place.
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