There are numerous industries that will definitely benefit when you have a fast and stable internet connection, and one of these is undoubtedly Digital Banking.
The emergence of digital banks, according to Banko Sentral ng Pilipinas (BSP), is seen as a game-changer in the delivery of financial services and products, that are usually provided by traditional brick-and-mortar banks.
What is digital banking?
The BSP defined a digital bank as a lender that mainly offers its services digitally or through a digital platform instead of the physical and traditional banks that we know of. It is the full digitization of a bank, all is included: processes, its products, down to the services. Digital banking completely transforms any portable device into a bank, which means that a client or person can perform all transactions and banking errands within a mobile application/platform.
Given the facts of a digital bank, it is explained that with digital banking, there is no more need for human or face-to-face interaction since everything is built with the latest technology, as well as data to improve the overall customer experience.
Online banking and digital banking still differ in some ways. As online banking is mostly like personal banking or mostly used for day-to-day financial activities, while digital banking includes much more, like online payroll, accountancy systems, and all other aspects of finances that fall under it.
Newly emerging digital banks in the Philippines
The BSP has made “digital banking” a new category of banks and awarded digital banking licenses to Maya Bank, Overseas Filipino Bank, Tonik Digital Bank, UNOBank, Union Digital Bank, and Gotyme.
The monetary board is hoping that these digital banks can help the BSP in achieving its goal of shifting 50 percent of total retail transactions in the country to digital and reducing the number of unbanked Filipinos. They are hoping that they can onboard at least 70 percent of Filipino adults to the financial system through bank accounts, lifting them from the unbanked situation. According to OpenGov Asia, this goal intends to transform, the Philippines into a cash-lite country.
During the pandemic, the use of digital payments was seen as the most convenient way for financial transactions as it reduce mobility, face-to-face interaction, and the risk to health safety. According to the BSP, in the first seven months of 2021, the value of transactions made through local E-wallets increased by more than 180% and another by more than 80%.
Fintech and Digital Banking
The massive growth of fintech companies is brought about by the complexity of the traditional financial system, which allowed fintech to see and find an opportunity in the poor banking experiences and created solutions that will benefit society. Digital banking is a move from traditional banking activities to a digital one where customers/clients can now find banking with the comforts of their portable devices. Both are deemed to have a different definition but unite in one goal — to make people financially included.
The use of contactless technology is undeniably growing. Recognizing this rapid growth and development in the financial scene, the goal of the BSP to make the Philippines a “cash-lite country” is nearer than we thought.
In the fintech scene, Piccopay is also envisioning creating seamless solutions for your payments, because we want to make your payments within your reach. Visit us at piccopay.sg for more inormation.
Reyes, Mary Ann LL. “Digital Banking in the Philippines.” Philstar.com, Philstar.com, 5 Nov. 2021, https://www.philstar.com/business/2021/11/06/2139242/digital-banking-philippines.
Hani, Aineena, et al. “Digital Banks to Bring Significant Impact on the Philippines Financial Sector.” OpenGov Asia, 6 Oct. 2021, https://opengovasia.com/digital-banks-to-bring-significant-impact-on-the-philippines-financial-sector/.
Villanueva, Joann. “Digital Banks Seen to Boost Deposit Accounts in Ph.” Philippine News Agency, Philippine News Agency, 12 Apr. 2022, https://www.pna.gov.ph/articles/1172107.
The emergence of digital banks in the Philippines: Game-changer in the financial inclusion agenda was originally published in Piccopay Pte. Ltd. on Medium, where people are continuing the conversation by highlighting and responding to this story.