NextGen Day

MANILA, Philippines — Three of the six digital banks that have been operational since 2021 have onboarded 120,000 deposit accounts, with the figure expected to increase after the three remaining banks commence operations this year.

Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP) said in a virtual briefing on Tuesday that “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.”

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

Maya Bank is the other digital bank that has begun operations, while Gotyme, UnoBank, and UnionDigital, the digital bank of Union Bank of the Philippines, are all slated to begin operations this year (Unionbank).

OF Bank is reaching the end of the three-stage licensing process to function as a full-fledged digital bank, according to Diokno, while Tonik Bank and Maya Bank have completed it.

He stated that Tonic Bank commenced operations on February 14, 2022, and Maya Bank began operations on March 14, 2022.

He described digital banks as “critical enablers” of the country’s digital transformation since they provide new and entirely digital offerings without the need for physical branches.

“Because 47 percent of Filipino adults are still unbanked, this might mean the difference in digital bank operations and greater market penetration.” As cloud natives, they can quickly span more distances at a lesser cost than traditional brick and mortar banks,” he said.

According to Diokno, the sector is also a great help in empowering micro, small, and medium companies (MSMEs), which make up 99.6% of the country’s firms.

Corporate deposits and credit are among the digital banks’ current product offerings, according to Diokno, which “allow MSMEs to access a transaction account for payment collection, disbursement, and bill payment.”

Diokno says the central bank “remains dedicated to providing an enabling regulatory environment that supports digital innovation and transformation while ensuring that associated risks are adequately addressed” with these advancements.

“The BSP continues to tighten rules to create a secure environment for digital banks,” he added, noting that these steps include updating Information Technology risk management policies, with a focus on the installation of automated and real-time fraud monitoring and detection systems.

“In addition, the BSP has been aggressive in promoting cyber resiliency and lobbying for the zero-trust paradigm to tighten cybersecurity and IT risk management rules,” he added.

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