While Day 1 of Fintech and Blockchain Innovation Summit 2018 – Digital Transformation Series – almost focused on the blockchain, Day 2 took a step back to discuss regulation, transformation, and opportunities for traditional industries in this age of blockchain and fintech.
- Read More: Blockchain dominates Day 1 of DTS 2018
Day 2 kicked off with Mr. Melchor Plabasan, Deputy Director at Bangko Sentral ng Pilipinas (BSP). Mr. Plabasan discussed the famous Circular No. 944, which is the BSP’s guidelines for Virtual Currency Exchanges and how they came up with it.
Subsequent speakers credited the BSP in its open approach to fintech. While the agency does not endorse cryptocurrencies, Mr. Plabasan ensures that any form of regulation will always be a multi-collaboration between the government and the players in any given field. An example of which is how it consulted firms such as SCI Ventures in coming up with the circular.
Regulatory risks are present if different government agencies have different opinions on issues affecting fintech and blockchain. As such, Mr. Joel Valdes of Joel C. Valdes and Associates thought regulation must be a collegial effort among the regulators, such as the Securities and Exchange Commission (SEC), the BSP, and the Bureau of Internal Revenue (BIR).
The biggest laggards in fintech are the banks, said Arvie De Vera, head of Fintech Business Group at UnionBank of the Philippines. He mentioned that we are now in Wave 3 of the Fintech revolution and for banks to survive, they should innovate within themselves through the following:
- Channel Extension
- To expand and reach further
- Tech Advantage
- To be fast, reliable, and scalable
- New Customer Acquisition
- To service new segments
- New Lending Models
- To use existing payment flows for credit
- Engage Fintechs
- To innovate, learn, and enable
UnionBank is aiding rural banks in this transformation through the blockchain. We have discussed this before in a previous article and will write more about this UnionBank – Rural Bank collaboration in the future.
The blockchain presents numerous opportunities for industries to innovate. For Mr. Ramon Tayag of Bloom Solutions, the remittance industry stands to increase efficiency using the blockchain. As an example, transfers will be on the same day and the fees will be cheaper. Mr. Rafael Padilla of SCI Ventures also echoed the same sentiments.
For Mr. Zach Piester, the insurance industry is highly regulated and rarely innovates. There are significant admin costs and back office inefficiencies. If you are currently claiming for an insurance, you know that the process also takes a long time. The blockchain can help the industry more efficient. Examples of which are 1) detail real-time audit trails of past transactions and 2) smart contracts for contractual enforcement.
Lastly, opportunity can knock to businesses who take advantage of Initial Coin Offerings (ICOs) to expand. Mr. Patrick Palacios of Appsolutely/Loyal Coin shared his success story and also talked about how businesses should do ICOs the right way. According to him, Loyal Coin succeeded because they have a clear vision of what they want to do, and they already have a working product. This is in stark contrast to majority of the tokens in Coinmarketcap’s top 20 coins that still don’t have a live product. We will discuss this in a separate topic in the coming days.
The Fintech and Blockchain Innovation Summit 2018 – Digital Transformation Series is an event organized by Enderun Colleges. Bitpinas would like to thank the organizers for the invitation.