By Nath Cajuday
“The emergence of digital banks can be a game-changer on the delivery of financial products and services from traditional brick-and-mortar banks.”
This is the statement of Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno during a webinar hosted by the Management Association of the Philippines (MAP).
Highlighting that digital banks can boost the competitiveness of existing banks in terms of digital transformation and to stay relevant, Diokno stressed that digital banking can “advance financial inclusion, usher prosperity and alleviate poverty” as it offers “affordable financial services” to the public.
“In all of these, the customers and the business community are the ones who will reap the benefits,” he guaranteed.
Late last year, the BSP approved adding digital banks as the newest and the country’s seventh bank category.
As of the moment, the central bank already granted license to six digital banks, namely: Overseas Filipino Bank of Land Bank of the Philippines (March 25, 2021); Tonik Bank of Singapore (June 3, 2021); UNObank of Singapore (June 3, 2021); UnionDigital of Union Bank of the Philippines (July 15, 2021): GOtyme of Robinsons Bank Corp. (August 12, 2021); and Maya Bank, owned by PayMaya of PLDT Inc. (September 16, 2021).
However, stating that seven digital banks are enough for the next three years, BSP’s Monetary Board already closed the applications for the seventh digital bank license at the end of August.
Digital banks provide financial products and services that are processed through a digital or electronic platform with no physical branch. This suits the current situation of the country that is greatly affected by the pandemic, and offers easier service to the Overseas Filipino Workers and to the mass market.
On the other hand, despite the announcement of BSP to limit the number of digital banks to just seven to monitor and gain the experience in the supervision of digital banks, Diokno declared the possibility to reopen the window for digital bank license applications if additional digital banks are needed.
BSP’s goal in digital banking is to help the central bank to reach its goal – to attract 70% of Filipino adults into the banked population, and 50% of the payments be done online by the year 2023.
This article is published on BitPinas: Rise of Digital Banks a ‘game-changer’ – Bangko Sentral