Project Background

Financial Technology and digital innovation to modeRnise and develop cUrricula of VietnameSe and Philippines UniversiTies (TRUST)

Saint Louis University Rationale: Business competition/government regulation force the financial services industry to adapt technology. Financial service industries (banks, insurance and investment firms) need to work with financial technology to gather significantly large data, process it, give reliable information for stakeholders and make rational decisions.

Financial education is a paramount challenge in the Philippines. Based on the rating of Standard/Poors (S&P), there are only 25% of Filipinos who are financially literate and less than one (1) % who has knowledge in investing (Manila Times, 2016). This is deemed to be a great challenge since it can really pose threats to the living standards of Filipino families. Empirical studies have established that financial education impacts behavior (Ansong & Gyensare, 2012) and people with low financial education are more likely to incur more debts (Lusardi & Mitchell, 2011) and less likely to save or invest for their future. In this sense, there is a need to design and implement financial education enhancement policies and it should become a vital program of HEIs. Therefore, SLU aims to promote financial education to ensure a guarantee on poverty alleviation and sustainability rather than encouraging extreme financial dependence (Noctore, Stoney & Standing, 1992).

Financial education is a key component for sound financial decision making and it allows wealth creation and accumulation (Lusardi & Mitchell, 2011). By creating an effective financial education program, the behavior of the students could be improved that could allow them to save, to improve their spending habit, and to invest potentially. Financial education could impact their financial behaviors and they can make rational decisions for the amount they receive from the government (Wagner, 2015). Financial education program entails enhancement of financial awareness, knowledge, skills, attitudes and behaviors that are necessary for making sound financial decisions. Using financial concepts in making decisions could allow individuals to improve their well-being (Servon & Kaestner, 2008) and allow them to understand the importance of savings, developing sound spending patterns, and creating investment opportunities that could improve their future (Brown & Graf, 2013).

Mapua University Rationale: Although the Philippines has ample financial services, the availability of financial data for analysis is very difficult to find. Even the Philippine Stock Exchange (PSE) that sells data for daily stock prices only provides PDF files of daily quotes for stock prices and other information of all listed companies, making it hard for researchers to analyze such data. Another roadblock to researchers is that these daily quotes would cost them P50 per day or P18,250 for one-year data. This makes it difficult for independent analysts/investors/researchers to study the Philippine Market. Master with financial Digital Innovation will surely strengthen the financial competency/literacy among Filipinos. With the integration of digital innovation such as business analytics in the program, this would facilitate a more efficient way of solving analytical problems in the financial sector. Students will be able to interpret, analyze and utilize financial information with the use of different tools and make good investment decisions.

Fintech PH Association Rationale: A survey among members shows 3 needs: 1. Improved digital infrastructure; 2. Finding the right technology talent; 3. Better government incentives and transparent regulation. As concerns HE training offer 3 top HE requirements: 1.need for enterprise-level developers/architects; 2.better training/talent development outside the national capital region of Manila; 3.improved foundational education in mathematics/engineering.

University of Cebu Rationale: The financial understanding and literacy index in PH is relatively low compared to some of its ASEAN counterparts, more so compared to Western and European economies. The financial technology and management literacy is now being strengthened by the Central Bank of the Philippines through its awareness and information drive initiatives. Banks are also doing the same to promote this endeavour. Further, in recognition of the problem in financial education even at the basic level, the Department of Education with its 800,000 plus employees, is also gearing up for financial literacy initiatives and trainings.  Research shows that in terms of financial literacy, many professionals are having challenges at basic financial management on personal level.  Many are having problems in the aspects of planning and very few have graduated and comfortable dealing with money placements and investing issues. With the new financial and investment platforms, technology-based financial-related products available in progressive and emerging economies around the world, the need to update and advance in the areas of financial technology is really a step in the right direction.  This is consistent on the idea that if we are to push further financial education beyond degree level we need to invest on the knowledge that accelerates financial inclusion one of which is financial technology.  

The interlinkage between financial services and information technology in developed countries appeared many years ago. Meanwhile, this process has only occurred in emerging and developing countries since 2008 with the pursuit of financial inclusion and economic development of the Governments. In Vietnam, although there had been some FinTech companies in the field of payment services since 2005 (VTPay, OnePay, VTCPay), the evolution of FinTech has only been explosive with the wide penetration of the internet and mobile phone in recent years. It is widely accepted that the potential for FinTech industry development in Vietnam is enormous. There are several reasons to explain this perspective. Firstly, the rate of financial inclusion in Vietnam is low. According to Solidiance, in 2017, only 59% of Vietnam’s population has a formal bank account compared to 86% in Thailand or 92% in Malaysia. However, this rate is expected to rise quickly and reach at 70% by 2020. Since Vietnam is one of the priority countries in which the World Bank is focusing its financial inclusion efforts through Universal Financial Access.

Additionally, the State Bank of Vietnam tries to reduce the cash-based transactions (currently, cash is used in 90% of transactions). The State Bank of Vietnam furthermore hopes that the number of transactions by cash will have decreased by being less than 10% by 2020. In other words, the fact that it will boost the use of payment services of Vietnamese citizens in the future and in turn, facilitate the development of FinTech. Nevertheless, there have still been some obstacles to the development of the FinTech industry. The first is the lack of regulation and legal framework regarding services in this field. For instance, there is no regulatory clarity related to the cooperation between banks and FinTech firms. Some services are not officially legalized, such as P2P lending (only banks and credit institutions are permitted). Next, with high potential for development, the FinTech industry will demand more funds and skilled workforce. However, FinTech companies lack capital resources and there are few training programs in this field. Finally, the habit of using cash in making transactions of citizens might take time to change.

In Vietnam, there is no finance and banking master programs or HE programs offering subjects in Fintech yet. Some institutions have cooperated with foreign universities offering master programs in finance and Fintech in which foreign universities will grant the degrees. One of these programs is Master of Science in Banking, Finance and Fintech of EM Normandie, France collaborated with Agence Universitaire Francophone, Vietnam National University, Hanoi. The first and only full FinTech education program in Vietnam is the cooperation between the School of Management, Asia University, in Taiwan and National Economics University, Vietnam, to offer a Bachelor of Finance and Banking in Fintech in 2018. Asia University, one of the top universities in Taiwan, has a Fintech and Blockchain Research Center, which studies the latest developments in technology adoption in the financial sector.

TRUST aims to improve the quality of the higher education in VN and PH in FINancial TECHnology and digital innovation-FINTECH to answer to the emergent workforce need of the future Financial Services industry. Specific objectives of the project are:

  • designing and developing of a master on FINancial TECHnology and digital innovation (FINTECH) in VN & PH Universities;
  • modernising of other masters of Business and Economics with specific contents on FINancial TECHnology in VN & PH Universities.

The 4° Industrial Revolution global transformation is also transforming the Financial Sector due to the technology invasion. The HE in the EU and in the world are trying to tackle this revolution too. Several educational programmes are born on FinTech, but there isn’t any feedback on their results or impact. TRUST project for the first time merges EU and South Asian HEIs and enterprises of the Financial Services Sector/FinTech startups to promote the HE modernisation, curriculum development and improvement of quality of HE in the Partner Countries, enhancing its relevance for the Financial Services labour market. The modernisation of the HE programmes on FINTECH in VN and PH will answer the partner countries’ needs of the HE in that field by filling the gap between the labour Financial Market emergent needs and the HE offers that have to answer these needs. To this aim, the collaboration with the financial services sector/FinTech startups is essential too. These objectives answer each HEI aim to improve the educational offer on the FinTech topic to be ready and competitive in the Financial labour Market of each partner country.

Despite a low rate of access to formal financial institutions, the banking sector in Vietnam has witnessed a revolution. However, more than 90% of payments remain cash-based. In Vietnam, there are no HE programs offering subjects in Fintech yet. Some institutions and universities have cooperated with foreign HEIs offering master programs in finance and Fintech in which foreign universities will grant the degrees.

TRUST project answers the needs of each target group that have to tackle this financial revolution by preparing the future task force of employers. In detail TRUST project allows:

  • to improve HEIs students knowledge and skills on FinTech topics in Vietnam to be ready to work on the emergent financial services sector and by increasing new graduated employability chance;
  • to prepare and equipped HEIs professors/researchers/HEIs staff in Vietnam with the needed knowledge and skills on FinTech to be able to prepare their students;
  • to increase the university-business cooperation in particular among enterprises’ staff/managers of the Financial Services Sector and/or FinTech Startups/IT companies in Vietnam.

To reach these objectives the partnership also includes the Philippine Association of FinTech that will contribute to the project by providing essential feedbacks for the mapping of the labour market needs of the Financial Services Sector in Vietnam, by participating in the designing and development of the master programmes, as well as by participating the implementation of the master programmes as lectures of the specific contents bringing their practical experiences and projects, and they will also host selected students of the Master in FinTech to undertake a practical experience.

USGM and the HEIs of each partner country have already had the chance to contact the Vietnamese Ministry of Education and Training (MOET), presenting the project and master programmes in FinTech expressing its interest in the project by participating as an associated partner. This will facilitate the further relationship among universities and the public body to get accreditation as well as to get the project overall feedback and suggestions for its sustainability.

Besides, each VN HEIs have already identified the masters to be updated with FinTech contents to guarantee the further project implementation at the institutional level, as follow: University of Economics and Business of VIETNAM NATIONAL UNIVERSITY (VNU): Master of Banking and Finance (64 ECTS); Master of Financial Institution Management (69 ECTS), Master in Financial Technology (60ECTS). College of economics (HCE): Master of Business Administration (120 ECTS); Master of Economic Management (120 ECTS). Ho Chi Minh City Open University (HCMCOU): Master in Finance and Banking (60 ECTS); MA in computer science (60 ECTS).

The project objectives will also be reached, thanks to the high qualified training-WP3. At least 60 professors/HEIs staff will be trained in Vietnam by participating in both workshops (study visits in VN and PH) and online training. Also, experts of Fintech companies will participate in the study visits in partner countries to provide its expertise on the FinTech needs

In the Philippines, only 4% of all transactions are made online, leaving considerable growth opportunities. With the entry of FinTech players, however, customers are switching to digital solutions. In the Philippines, only two masters exist on similar topics.

In particular, TRUS project answer the needs of each specific target group that have to tackle this financial revolution by preparing the future task force of employers. In detail, the TRUST Project’s objectives are:

  • to improve HEIs students knowledge and skills on FinTech topics/ technological innovations in the Philippines to be ready to work on the emergent financial services sector and by increasing new graduates’ employability;
  • to prepare and equip HEIs professors and researchers and other universities’ staff in the Philippines with the needed knowledge and skills on FinTech to be able to prepare their own students;
  • to increase the university-business cooperation in particular among enterprises’ staff/managers of the Financial Services Sector and/or FinTech Startups/IT companies in the Philippines.

To reach these objectives the partnership also includes four FINTECH Start-ups/IT companies as associated partners that will contribute to the project during the entire project duration by providing essential feedbacks for the mapping of the labour market needs of the Financial Services Sector in Vietnam, by participating in the designing and development of the master programmes, as well as by participating the implementation of the master programmes as lectures of the specific contents bringing their practical experiences and projects. They will also host selected students of the Master in FinTech to undertake a practical experience.

USGM and the universities in each partner country have already had the chance to contact the Philippine Commission on HE (CHED) presenting the project and master programmes in FinTech expressing its interest in the project by participating as an associated partner. This will facilitate the further relationship among universities and the public body to get accreditation and to get the project’s overall feedback and suggestions for its sustainability.

Besides, each PH HEIs have already identified the masters to be updated with FinTech contents to guarantee the further project implementation at the institutional level, as follow: University of Cebu (UC): Master in Business Administration-Thesis (12 units), Master in Business Administration-Non Thesis (12 units). Saint Louis University (SLU): Master of Business Administration (42 units), Master of Science in business administration (36 units). Mapua University (MAPUA): Financial & Economic Analysis (40 units), Strategic Marketing & Financial Management (40 units).

The project objectives will also be reached thanks to the high qualified training during the WP3. At least 60 professors/HEIs staff will be trained in the Philippines by participating in both workshops (study visits in VN and PH) & online training. Experts of Fintech companies will participate in the study visits in partner countries to provide its expertise on FinTech

The TRUST Project’s main target groups will be:

Higher Education Institutions (HEIs) students

  • HEIs professors/researchers, staff
  • Enterprises’ staff/managers of the Financial Services Sector and/or FinTech Startups/IT companies
  • Public bodies.

Students and academic staff demand a highly qualified financial education. Students need to be competitive for a changing global economy; the professional profile should be updated with the recent and forthcoming IT trends. Academic staff, on the other side, demands continuous training to be in line with the students’ requirements. Finally, Business actors have to be even more competitive in order to face the global challenges of a demanding economy and market while Public actors need to be skilled to comply with the recent innovations and proceed into structural Education changes. There has been a growing demand for finance professionals, particularly in banking, investment, insurance, business, financial planning, business analytics and other fields. There has been a growing number of enrollees in financial management because of the high workforce demand. However, there is also a growing demand for technology competence, analytical skills, international certifications, and FinTech literacy in the industry. Thus, Master in Financial Technology is essential and urgent. A major challenge also for the university is to enhance its business education. There is a need for HEIs to create a competitive advantage for their students and prepare them to be more adaptive to the dynamic trends in the financial industry. FinTech would provide financial methods that employ technologies to improve the delivery of financial products and services. Some of these technologies may include the use of smartphones and computers for mobile banking, investing, and business start-ups.

TRUST will provide the first program in the Philippines that will integrate digital innovation/business analytics tools to the study of finance.

Another example coming from the partner institution FPA Fintech Philippines Association, they will have as target group the employees and the professionals in the network as soon as the Master is active. TRUST will help build the fintech talent pool and equip the workforce with industry-relevant skills, technology, and investments, especially at the grassroots.

Moreover, the TRUST project curriculum development will include academic support in FinTech entrepreneurship as well as regular business development. Therefore, students trained in the relevant Master’s degrees can not only work on FinTech in established industries but could also potentially be entrepreneurship leaders themselves and develop financial technology apps and SMEs to develop their countries’ capacity.

TRUST Master in Fintech will be then essential for Asian target groups because graduate programs are based on the old template in terms of course offerings and delivery of instruction. While many can make a strong case that the programs that were offered have been working, no one can argue the fact that these have not been able to run parallel with the pace of technology. Being one of the top destinations around the world as evidenced by the Visayas area, technologies from other advanced countries are coming, and as a host country, Universities need to have the academic complements for institutions to lever on these available technologies, in this way competencies may spill faster than usual. This can also make the academe in sync with the realities with the industries.

In Vietnam, there are no finance and banking master programs or higher education programs offering subjects in Fintech yet. Some institutions and universities have cooperated with foreign universities offering master programs in finance and FinTech in which foreign universities will grant the degrees. One of these programs is Master of Science in Banking, Finance and Fintech of EM Normandie, France collaborated with Agence Universitaire Francophone, Vietnam National University, Hanoi. Vietnam’s FinTech market was worth US$4.4 billion in 2017 but is set to reach US$7.8 billion by 2020, according to research from Solidiance, an Asia Pacific-focused consulting firm. As the Fintech market continues to evolve in Vietnam, it has become more important than ever for Vietnamese financial professionals to understand how it works and its effects on the industry from a micro and macro perspective. Constant updates and continuing education have therefore become indispensable to making the most of every opportunity presented by each new Fintech development.

In Vietnam, as mentioned above, the training offer for FinTech is still very limited. TRUST project by enriching the HE programmes on FinTech with the collaboration of representatives of the financial service industry will be the very first master program offering a comprehensive curriculum in FinTech with the degree issued by Vietnamese Universities of the project. This master programme along with the new courses, will deepen students’ understanding of the rapidly changing Fintech landscape and the impact of new innovations on traditional business models in the world and in Vietnam. Students in Vietnam will be equipped to identify opportunities for disruption and harness new technologies to build a better business. The students will also explore current and emerging technologies around financial payments and markets, business model innovations, digital strategy, and advanced analytics.