The initiative aims to operationalise the Anti-Financial Account Scamming Act (AFASA), which CLAP President Arianne Ferrer designated as the group’s “first action item for next year.”
Arianne Ferrer
“Many of us already have real-time fraud management systems (FMS) in place. Where the rules are applicable to us, I would say we have a commitment and a promise to comply,” Ferrer said.
While the industry employs sophisticated fraud detection, structural challenges persist.
Moritz Gastl, General Manager at fintech firm Tala, noted that identity verification remains a major concern due to the lack of a consistently available universal ID, such as the national ID.
Data from the Cybercrime Investigation and Coordinating Center (CICC) revealed that the Philippines ranked second globally for suspected digital fraud rates last year at 13.4%, well above the global average of 5.4%.
According to CLAP, these incidents have eroded customer trust by nearly 62 per cent.
The sector is also navigating macroeconomic pressures. Gastl pointed out that the recent GDP slump to 4% and fluctuating consumer prices directly affect borrowers’ ability to repay loans, as many live paycheck to paycheck.
However, the association noted a paradox in the local market: economic downturns caused by natural disasters, such as typhoons, often trigger an increase in loan applications as consumers seek immediate financial relief through flexible lending options.
