With the global pandemic having an adverse effect on the Philippine economy where it cut down growth projections and left an economic shrinkage on its wake, the banking side of things have experienced a digital boom in terms of signups and usage. During the lockout and the months leading to the cautious economy reopening, it has been found that the number of Filipinos who have transacted in the digital banking services side of things have increased as Filipinos were remitting money, paying utilities on cross-platform and were using their debit / credit cards to purchase online.
Aside from banks, digital payments have also seen a robust growth as Filipinos signed up and filled their digital wallets (ie PayMaya, GCash, Paypal etc.) with cash and have been using them to transact online and make cashless payments offline across establishments.
Having seen the growth of the FinTech side of things despite the economic slowdown and pandemic, the Bangko Sentral ng Pilipinas (BSP), the nation’s central bank, have approved the proposed Digital Banking Licenses for would-be operators.
According to the BSP, at least 50% of payments, by 70% of adults will be done digitally by 2023 as this year, the country has experienced a great surge in digital payment means. Furthermore, the BSP stated that Digital Banks can help promote market and financial efficiencies in the finance sector and the cross-payments will be a safer and more secure way of remitting payments for Filipinos.
The nation’s leading banks have also reported brisk signups and usage of their mobile banking apps and have further stated that they will plan to expand the capabilities of these apps to emulate a full consumer or commercial banking experience in the near future. Currently, there are a number of banks that are operating in the Philippines and basing on projections, more digital banks will make its way to the country with the BSP having green lighted the license to operate.
With the efficiencies of fintech and powered by nascent technologies such as Blockchain, more efficiencies on the standard banking branch model may give rise to more digital-only banks and also influence the nation’s top banks to also boost their value proposition when it comes to digital banking.