Digital banks seen to boost deposit accounts in PH

By Joann Villanueva

April 12, 2022, 7:42 pm

<p><em>Bangko Sentral ng Pilipinas Governor Benjamin Diokno (File photo)</em></p>

Bangko Sentral ng Pilipinas Governor Benjamin Diokno (File photo)

MANILA – Three of the six digital banks that have started operations since 2021 have onboarded 120,000 deposit accounts and the numbers are seen to rise further once the three other banks begin operations this year.

“Digital banks will significantly contribute to the growth and development of the digital financial ecosystem catalyzing the achievement of the financial inclusion and digital transformation goals,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said in a virtual briefing on Tuesday.

The digital banks that have started account openings are the Overseas Filipino Bank (OFBank), a subsidiary of the state-owned Land Bank of the Philippines (Landbank), and Tonic Bank.

The other digital bank that has started operations is the Maya Bank while the other three that are set to start operations within the year are the Gotyme, UnoBank, and UnionDigital, the digital bank of Union Bank of the Philippines (Unionbank).

Diokno said OF Bank is nearing completion of the three-stage licensing process to operate as a full-fledged digital bank while Tonik Bank and Maya Bank have completed the process.

He said Tonic Bank began its operations on Feb. 14, 2022 while Maya Bank started on March 14, 2022.

The digital banks, he said, are among the key enablers of the country’s digital transformation since these offer innovative and fully-digital products without the need for physical branches.

“This can spell the difference in digital bank operations and in greater market penetration, especially since 47 percent of Filipino adults are still unbanked. As cloud natives, their financial services can quickly cover broader distances at much lower cost than traditional brick and mortar banks,” he said.

Diokno said the sector is also a big boost in empowering micro, small, and medium enterprises (MSMEs), which accounts for around 99.6 percent of businesses in the country.

Among the product offerings of the digital banks to date include corporate deposits and credit, which, Diokno said “enable MSMEs to access a transaction account for payment collection, disbursement, and bills payment.”

With these innovations, Diokno the central bank “remains committed to providing an enabling regulatory environment that fosters digital innovation and transformation, while ensuring that attendant risks are effectively managed.”

He said “the BSP continues to enhance regulations to promote a secure environment for digital banks’ and these measures include the issuance amending Information Technology risk management policies, particularly on the implementation of automated and real-time fraud monitoring and detection systems.

“Moreover, the BSP has consistently been proactive in promoting cyber resiliency and advocating for the zero-trust model to strengthen cybersecurity and IT risk management regulations,” he added. (PNA)