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Fintech eyes to bridge PHL, Indo rural banks

Business Mirror | 3 July 2020

Homegrown financial technology (fintech) firm PearlPay is aiming to interconnect rural banks in the Philippines and Indonesia within the next two years in a bid to ease remittances.


PearlPay CEO Spark Perreras, in a recent interview, said that the company was building a unified payment network for rural banks here and in Indonesia.


So far, there are 200 rural banks that signed up for the program locally and additional 252 participants abroad. Perreras said that even Filipinos working in Indonesia, who are usually teachers in universities, will also be benefitted from this project as this simplifies the remittance process.


“We are unifying, aggregating all these rural banks to be interconnected,” he said. “Because of lack of access to infrastructure, technology, digital banking platform, they [rural banks] are fragmented.”


PearlPay was focusing on rural banks given their large potential network in the country.


Perreras said that there are 450 rural banks in the Philippines with 2,745 branches—95 percent of which are in far-flung areas that have no access to commercial banking. There are also around 9 million customers in rural banks, he added.


Indonesia, meanwhile, has over 1,600 rural banks and more than 10 million existing customers, he noted.


“The moment we onboard them to our end-to-end digital platform, we are actually … interconnecting all these rural banks. Virtually, it will be bigger than the top three banks combined in terms of network,” he added.


Currently, the fintech firm is doing a pilot study with two local rural banks. He said that the company is about 88 percent complete the version 1.0 of its core banking solutions, adding that it was anticipated to be fully accomplished by next month.


The said solution will be compliant of Bangko Sentral ng Pilipinas regulations, including financial reporting package and regulatory compliance reporting, he said.


“We expect them [rural banks] to onboard, to fully migrate in our platforms four to six months after,” Perreras said. “By the time we fully migrate them, that’s the time we will start generating revenue.”


He said that it would take two years before PearlPay hit at least its break-even point. For now, the PearlPay chief said that the company was more focused on helping the rural banks be digitally transformed.


In delivering services, PearlPay has been using the cloud architect of Amazon Web Services (AWS) to develop cloud-based programs to facilitate individual-to-bank transactions. Among the AWS services being availed by PearlPay are data analytics, machine learning and artificial intelligence.


PearlPay is a fintech firm headquartered in the Philippines with regional offices in Hong Kong, Indonesia and Singapore.


Original Article

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