Financial technology (fintech) has revolutionised the entire industry – improving access to and the usage of services, in a trend especially pronounced during the Covid-19 crisis – and has become firmly entrenched in business, investment and a host of other essential economic activities in the post-pandemic world, pundits stressed on November 11.
They were speaking at an event on the FinTech Stage of the inaugural Cambodia Tech Expo (CTX) held in Phnom Penh on November 11. The stage was set up as a platform to gather community input to inform policy decisions on the development of the local fintech sector, as well as to accelerate the creation of digital economy and fintech solutions and applications in the Kingdom.
Ministry of Economy and Finance permanent secretary of state Vongsey Vissoth said that the pandemic has underscored fintech and digital technologies as “high-potential” drivers of regional and global economic growth, as demonstrated in four main patterns.
These, he said, are upticks in fair competition and the efficiency of financial service provision; the creation of new market segments and re-enforcement of existing ones; improvements in financial inclusion through a range of easy-to-use digital platforms; and enhancements and expansions in the ecosystem of micro-, small- and medium-sized enterprises (MSME) and start-ups.
“During the Covid-19 pandemic, electronic payment systems’ use has continued to increase. In observing the potential of the fintech sector, the Royal Government of Cambodia is currently preparing the draft Cambodia Fintech Development Policy in order to establish a common framework for the fintech sector.
“[The policy would also] contribute to addressing the various shortcomings in the accelerating fintech development, with the Digital Economy and Business Committee as the responsible institution for facilitating the drafting,” Vissoth said.
At the same event, Cambodia Microfinance Association chairman Sok Voeun noted that the local financial industry has been in a “critical digital transformation” over the last decade.
The National Bank of Cambodia (NBC) has implemented a number of major national interoperability platforms such as Cambodia Shared Switch (CSS) which inter-connected all ATMs, the FAST system and Real-Time Fund Transfer (RFT), as well as the KHQR system based on blockchain technology, he said.
“The Covid-19 pandemic has played a crucial role to accelerate this trend as many industries have moved to cashless transactions,” Voeun said, adding that new delivery apps as well as e-payment and other fintech solutions of improving service quality continue to be rolled out and adopted by Cambodians for their quality-of-life benefits.
Meanwhile, Association of Banks in Cambodia (ABC) chairman Raymond Sia told the event that the pace of digitalisation in the Kingdom was at a record high.
To illustrate his point, Sia said that, according to the World Bank, mobile cellular subscriptions in the Kingdom rose from 57 per cent of the population in 2010 to 126 per cent in 2020. “Nearly every Cambodian has a mobile phone,” he claimed.
“In the financial sector, we have seen more than a 10-fold increase in digital transactions over the last two years through payment systems and payment providers,” he said, adding that ABC data show that the value of said transactions ratcheted up by nearly five-fold, passing $250 million per annum.
“In the financial sector, digitalisation, innovation, and technology are centred around our customers. Our industry is a people-centric industry. Financial services are a primary need and we shall ensure that they reach all Cambodian citizens for the success and sustainability of the sector and the economy,” he added.
For reference, the NBC reported that 698.8 million electronic payment transactions totalling $199.76 billion were made in the Kingdom last year.