Digital shift permanent, says survey

by Lawrence Agcaoili (The Philippine Star), 28 Oct 2020

MANILA, Philippines — The shift by businesses in the Philippines to digital transactions may be permanent as the country continued to impose varying degrees of containment measures to limit the spread of COVID-19, according to a survey conducted by the Economist Intelligence Unit (EIU).

The study for TransUnion titled “New dimensions of change: Building trust in a digital consumer landscape” showed that nearly 84 percent of Philippine executives and 85 percent of global executives who participated in the survey believe smooth transactions are essential to business survival rather than merely a competitive edge during and after the pandemic.

The survey showed thath 64 percent of the Philippine respondents believe the rate of digital adoption in their industry is faster than others. This is lower than India’s 74 percent, but higher than South Africa’s and Brazil’s 61 percent, Dominican Republic’s 58 percent, as well as Chile and China’s 56 percent.

The global average is 54 percent. Over 1,600 senior executives at consumer-facing companies participated in the survey, including 115 in the Philippines.

“Digital adoption is generally perceived as rising faster in the Philippines compared with the global average. In part, this can be attributed to a large adoption of social media and a growing e-commerce market,” EIU said.

To capitalize on the opportunities of digital commerce, the Department of Trade and Industry (DTI) aims to double digital commerce in the country by 2022 as small and medium enterprises (SMEs) enter the market and the number of internet users increase.

As part of the Digital Payments Transformation Roadmap 2020 – 2023, Bangko Sentral ng Pilipinas Governor Benjamin Diokno has committed to transform the Philippines into a cash-lite from a cash-heavy economy with digital transactions accounting for half of the total transactions in terms of value and volume by 2023.

TransUnion Philippines president and chief executive officer Pia Arellano said COVID-19 has dramatically accelerated digital transformation with 78 percent of Filipino executives who participated in the survey saying their organization has changed their digital transaction process.

“But all of this digital progress will be wiped out if we can’t remove these barriers to building bilateral digital trust. For instance, 70 percent of Philippine executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches,” Arellano said.

As growth takes off, executives in the Philippines say data-privacy regulations are bene?cial and that arti?cial intelligence (AI) could lead to faster transaction authentication.

However, they also question existing legislation and express worries over accountability

About 92 percent of Philippine executives say biometrics are likely to be used to authenticate the vast majority of payments in the next 10 years and 46 percent noted that improved fraud detection and security is the greatest benefit to using AI.

Furthermore, the vast majority of executives in the Philippines or about 84 percent think the national digital IDs would help fraud prevention in consumer transactions and 77 percent believe a national digital ID would give low-income groups access to consumer services they would have previously been excluded from.

“Ensuring consumer trust starts with preventing fraud. Our research overwhelmingly showed that biometrics, AI and national digital IDs aren’t just a fad for consumer fraud prevention. They are key for trusted commerce for the foreseeable future,” Arellano said.

About 82 percent of Philippine executives believe consumers are comfortable sharing personal data with private companies and 79 percent believe consumers are comfortable sharing personal data with governments.

“Technological innovations like AI, biometrics and national digital IDs paired with proven fraud prevention methods like device intelligence can provide a more convenient and inclusive way for consumers to transact that still protects security and privacy,” Arellano said.