Digital banking adoption leaps forward
Over the past two years, the pandemic saw an increase in the adoption and awareness of digital financial services
Daily TribuneOver the past two years, the pandemic saw an increase in the adoption and awareness of digital financial services
Leila Martin, OFBank president and CEO. | photograph courtesy of ofbank
The Filipinos' use of digital banking has entered a stage of acceleration, fueled largely by the pandemic and innovations by stakeholders. Therefore, now is the time for the country's banks and nonbank financial institutions to rethink their value propositions and build the capabilities that will allow them to thrive and stay relevant.
"The Philippines gained momentum in adopting digital banking during the pre-pandemic years and was further fast -tracked with the customer shift to digital payments due to mobility restrictions posed by Covid-19," said OFBank president and CEO Leila C. Martin in an interview with the Daily Tribune. "We continue to make considerable progress towards building our digital financial ecosystem. In terms of the establishment of digital banks, for example, we are rapidly catching up with our neighbor countries in Southeast Asia."
Over the past two years, the pandemic saw an increase in the adoption and awareness of digital financial services. Indeed, the Bangko Sentral ng Pilipinas licensed six digital banks, with OFBank being the very first in the Philippines, faring well against Singapore and Malaysia with four and five licensed digital banks, respectively.
As consumers seriously consider innovative propositions from digital-only banks, Martin said the sector expects its client base to widen as the stakeholders continue to promote the shift to more convenient and secure digital platforms for banking transactions.
"We likewise support the position of the BSP in limiting the number of players, for now, to be able to closely monitor and assess the performance of digital banks in the country's financial system," she added.
Ready for digital banking
To thrive in the era of digital banking, banks must meet the challenges by acquiring new skills and capabilities to capture growth opportunities, Martin added.
According to her, the usage of digital banking channels in the country has steadily grown over the years, indicating the willingness of Filipinos to embrace digitalization.
"More and more Filipinos are now using digital platforms to pay for their transactions, increasing up to 30 percent of the total share of digital payments in 2021 from 20 percent in 2020," she said.
She explained the recent establishment of digital banks was also welcomed by the local market, with the volume and value of electronic payments and financial services processed through digital banks reaching 1.4 million transactions and P8.45 billion, respectively, in the first half of 2022
"As expected, there are still reservations about the security of digital finance from the public. Some are uncomfortable using highly -modern financial products, mainly due to a lack of information. One way to address this is through extensive public education campaigns that highlight the safety and convenience of digital banking," Martin said.
The OFBank executive expressed confidence the digital banking industry will sustain its upward momentum, with BSP leading the country's digital transformation through its policies and regulations, in collaboration with key players and other stakeholders.
Adoption and acceleration
According to Martin, the Covid-19 pandemic highlighted the need for digital banking services for individual customers and businesses, with the global health crisis limiting in-person transactions.
The strict mobility restrictions served as a catalyst to push financial digitalization, spurring the emergence of digital banks and other digital payment platforms such as mobile wallets and, consequently, the broader adoption of digital banking channels.
"In the case of OFBank, we leveraged digital solutions to continue delivering uninterrupted essential services to OFWs and their families. Despite transport and mobility restrictions around the globe, we were able to provide them with a secure and safe way of sending back money to their families here in the Philippines without the need to go to remittance centers physically," she said.
Martin continued, "We saw firsthand the shift of customers to digital banking channels, thus highlighting the convenience of OFBank's products and services. In fact, we have seen a 114.4 percent growth in accounts opened by the end of end-2021."
The OFBank experience
As a state-owned Bank, OFBank sets itself apart from other digital banks through the stability, security, and reliability of its product and service offerings tailored explicitly to overseas Filipinos' needs.
Depositors are assured that their hard-earned savings are safe and secure in a government bank like OFBank. Further, OFBank eliminates high transaction fees when sending money to other OFBank and LandBank accounts, typically with private money transfer agencies.