Challenges in Entering the Philippines Fintech Market

Philippines Fintech Market Entry

The Philippines, a nation of over 7,000 islands, boasts a young, digitally savvy population and a burgeoning economy, making it a prime target for fintech ventures. However, beneath the alluring surface lies a complex terrain riddled with obstacles for foreign players eager to plant their flag. Understanding these challenges, armed with data and insights, becomes the key to navigating this dynamic market successfully.

Challenges of Entering the Philippines Fintech Market

Regulatory Labyrinth: A Maze of Approvals

Firstly, the regulatory landscape poses a significant hurdle. Multiple agencies, including the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission (SEC), and the Insurance Commission (IC), oversee different aspects of fintech, leading to confusion and delays in obtaining licenses and approvals. Navigating this intricate web can be time-consuming and expensive, with the average time for fintech license approval hovering around 6-12 months.

Financial Inclusion Gap: Reaching Beyond the Banked

Despite strides towards financial inclusion, 43% of Filipinos remain unbanked or underbanked, according to the BSP. This presents a double-edged sword for fintech companies. While it signifies a vast untapped market, it also highlights the need for solutions that cater to a segment with limited access to traditional financial services or the digital literacy required to utilize them.

Cash is King: A Sticky Tradition

The Philippines remains deeply entrenched in a cash-based economy, with 85% of transactions still conducted in physical currency, even in urban areas. This poses a significant challenge for cashless fintech solutions, requiring innovative strategies to overcome ingrained habits and build trust in digital alternatives.

Cybersecurity Concerns: Building Trust in the Digital Realm

The Philippines has witnessed a rise in cybercrime incidents, with 66% of Filipinos expressing concerns about data security online. This necessitates robust cybersecurity measures from fintech companies to build trust and ensure user data protection. Investing in cutting-edge security solutions and adhering to stringent data privacy regulations like the Data Privacy Act of 2012 becomes paramount.

Competition Heats Up: A Crowded Playing Field

The Philippines fintech market is experiencing a surge in activity, with both local and foreign players vying for market share. This intense competition, with over 200 registered fintech companies as of 2022, makes it challenging for new entrants to stand out and attract customers. Differentiation through innovative products, targeted marketing strategies, and strategic partnerships becomes crucial for survival.

Talent Acquisition: Finding the Gems in the Archipelago

Securing skilled professionals with expertise in both fintech and the nuances of the Philippine market can be an uphill battle. The limited talent pool can hinder a company’s ability to innovate and scale its operations effectively. Investing in talent development programs and actively seeking collaborations with local universities can help bridge this gap.

Cultural Nuances: Understanding the Local Palette

Cultural sensitivity is vital for successful market penetration. Tailoring products and marketing strategies to local preferences and addressing cultural nuances is crucial for gaining customer acceptance. For example, understanding the Filipinos’ strong sense of community and collectivism can inform the design of features that promote peer-to-peer transactions or group savings initiatives.

Infrastructure Limitations: Bridging the Digital Divide

While internet penetration has grown significantly in recent years, reaching 73% in 2022, disparities persist across regions and income groups. The uneven distribution of digital infrastructure, particularly in rural areas, can hinder the adoption of fintech solutions, requiring targeted efforts to bridge the digital divide and ensure inclusive access.

Strategies for Success

  1. Partner with a local regulatory consultant. Leverage their expertise to navigate licensing processes and ensure compliance.
  2. Develop micro-loan & savings products with minimal fees. Cater to smaller transaction sizes and offer flexible repayment options.
  3. Partner with existing cash payment networks. Integrate with established cash-in/cash-out channels to facilitate easy access.
  4. Implement industry-standard security protocols & transparent data privacy policies
  5. Partner with local universities & offer internship/training programs. Build a talent pipeline and cultivate future employees familiar with the local market.
  6. Conduct market research & tailor marketing messages to local preferences.


ASEAN Business Partners can help clients understand the landscape, embracing the challenges, and implementing well-defined strategies, such that foreign fintech companies can contribute to the Philippines’ journey towards financial inclusion and economic growth, becoming integral players in the archipelago’s vibrant digital future.

About the Author

Jun De Dios
EVP for Growth & Strategy | Profile

Jun De Dios is our EVP for Growth & Strategy and he is also our Country Manager for Philippines. Jun was the CEO for AkzoNobel in Vietnam from 2008-13, and then CEO in Indonesia, before being appointed Cluster Director for Indonesia, Malaysia, Thailand, Philippines, Papua New Guinea, Australia, New Zealand and Pacific Islands over the period 2013-2019.