INCREASED collaboration between established players and startups is the way forward to navigate and survive the digital age, as Philippine regulators work towards building an ecosystem that allows businesses to stay competitive while allowing innovation to flourish.The rhetoric surrounding disruption used to revolve around traditional businesses going obsolete with the emergence of new technologies, but the narrative has taken a more positive approach recently, Adrian Lawrence, head of Asia Pacific Technology, Media and Telecommunications Group at Baker and McKenzie, said during the Digital Disruption Forum in Makati City on Thursday. "We are seeing a lot more cooperation, seeing a lot more startups being brought into the fold and supported by larger institutions, (that are) seeing the benefit that comes from the innovation of the startup sector rather than a battle between startup sector and established businesses," Mr. Lawrence said in the forum organized by the European Chamber of Commerce of the Philippines. Baker and McKenzie's "Simplifying BusinessIn a Complex World" report showed that the need to innovate and disruption through new technology are two of the biggest challenges facing businesses today.About 84% of respondents are bracing fora major technology disruption in the next two years, with financial services, consumer goods, retail and health care among the most critically challenged sectors."What we are seeing is the businesses that are able to deal with, pivot and embrace technology are the ones whose businesses are able to continue," Mr. Lawrence said.The Bangko Sentral ng Pilipinas (BSP) is implementing a test and learn approach to help drive innovation and at the same time understand the risk attached to the adoption of new technology." The BSP is continuing to have this forward looking approach to ensure regulatory and supervisory frameworks are in tune with emerging trends and developments, "BSP Deputy Governor Chuchi G.Fonacier said. "Through constant surveillance and monitoring of market environment, the BSP stands ready to adapt to future challenges and opportunities ahead," she added. Union Bank of the Philippines sought the assistance of the BSP in every step of its digital transformation. The Aboitiz led lender now makes use of cloud computing, artificial intelligence and blockchain in its operations, saidHenry Rhoel R. Aguda, chief technology and operations officer and chief transformation officer of the bank. Regulators have the potential to drive disruption and guide business transformation. Take for example the telecommunications sector, which is under pressure from over the top players offering the same staple services of voice and messaging that used to be the turf of traditional telcos. Department of Information and Communications Technology (DICT) Officer in Charge Eliseo M. Rio, Jr. acknowledged that the country's telecom laws need to be updated. The Public Services Act was crafted in 1936, while the Public TelecommunicationsAct was put in place in 1995. "More than just having one additional player now (or having a national backbone for the government), if we have these policy and regulatory reforms, we will have a more vibrant telco industry where big and small players can participate," said Mary Grace Mirandilla Santos, lead convenor of the Better Broadband Alliance.
This article was originally published in Business World on April 9, 2019.
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