PARTNER FEATURE: Seven years after a change in strategy to introduce non-traditional telecoms services to boost inclusion in the Philippines, Globe Group president and CEO Ernest Cu believes opportunities still exist in the country to improve efficiency and make life more convenient.
“We’re not yet a developed country, so there’s a lot of opportunities to help Filipinos live in a digital manner,” said Cu.
In an interview with Huawei and Mobile World Live at MWC 2023 Barcelona, Cu explained the company decided to move from being a telco to a technology company after emerging as the largest mobile player in the country back in 2016.
“We shifted to become a purpose-led company, which means going beyond winning the telco game to actually helping Filipinos in their daily lives, helping the country improve its stature in the world.”
The company’s approach was to develop a suite of digital services to address everyday problems across finance, education and healthcare, among others.
He said it started with financial inclusion, as back then just 33 percent of Filipinos had access to banking services, and only about 3.5 million had credit cards.
Processing digital payments and giving customers credit scores was a major challenge, he noted.
To address this pain point, Globe launched mobile wallet GCash in 2004, becoming among the first to introduce mobile money in the country. Securing investments from Ant Financial, owned by Alibaba, and the Ayala Corporation in 2017, GCash has grown to become the Philippines’ No. 1 financial app, giving eight out of 10 Filipinos access to financial services, from payments and money transfers to credit and investments.
“We’ve truly democratised financial services in the Philippines,” said Cu.
A key to financial inclusion is providing access to credit, but the biggest barrier is many of those in need are undocumented and have no collateral.
Globe developed GScore, a credit scoring tool which enables it to determine credit worthiness through a person’s digital behaviour rather than traditional collateral.
This gives users access to fair lending, creating a viable alternative to loan sharks.
Cu said the operator is now looking to solve bigger problems in the Philippines, with a focus on healthcare, education and sustainability.
The company plans to make use of its many assets, including a customer base of 92 million, which give it “tremendous marketing capability,” as well as an employee base with a culture of innovation.
Outside of the Philippines, its expansion is geared towards serving the needs of Filipinos. Some 10 million citizens reside outside the country permanently or work overseas temporarily and remit money.
One of Globe’s first moves overseas was to enable those living abroad to sign up for a GCash account using their local numbers. Previously, the central bank limited it to Filipinos in the Philippines.
“That’s a very big thing because remittances to the Philippines is an ever-growing space, amounting to more than $36 billion a year in terms of inward remittances. That flow now can be done more expeditiously, more cost-effectively through GCash,” he said.
Its second step overseas was to allow Filipinos, many without credit cards, to pay electronically by working with Alipay. It first empowered GCash users to make digital payments in Japan, South Korea, Thailand and Malaysia, and is now moving into Europe, targeting France, Germany and Italy.
Cu acknowledged there have been many challenges along the journey, noting Filipinos tend to look at new applications or new ways of doing things with a bit of mistrust.
“We have to build their trust. The biggest challenge is shifting people’s mindset,” he pointed out.
A second obstacle is the regulators. “We are now pushing the envelope in terms of the things we want to do, and sometimes they are still mired in the old way of doing things.”
He added it often takes the company quite a bit of time to convince authorities to see that a project is beneficial for the country.
Looking ahead, the CEO is comfortable with Globe’s market position in the mobile sector. “We’ve been in the number one position going on seven years now.”
And in terms of its ability to incubate new ideas by using its assets to build new businesses, he believes Globe is far ahead.
“This didn’t happen overnight. We did not decide to do this one year and the next year we’re done. It has been a 14-year journey, which I started when I joined the company nearly 15 years ago.”
Cu plans to continue developing new digital initiatives.
“Hopefully with the support of our government and the support of our partners, we will bring about a better life for our countrymen.”Subscribe to our daily newsletter Back