With the rise of artificial intelligence or AI, traditional banks are maximizing machine learning to offer the right investment option to clients and other products for personal finances.

“This AI-powered personal finance management tool will revolutionize the way you manage your finances. It tracks and analyzes your financial activities, offers insights into your spending habits, suggests innovative investment opportunities, and helps you plan for a secure financial future,” Bank of the Philippines Islands (BPI) president and chief executive officer TG Limcaoco said.

BPI Wealth, asset management arm of BPI, integrated its unit investment trust fund in the bank’s mobile app where clients can place a minimum investment of P1,000. Previously, the bank required P10,000.

Thanks to e-wallet GCash, BPI Wealth has attracted more individuals who are exploring investing as it takes advantage of the network of their parent company Ayala Corporation.

GInvest by GCash allows a P50 minimum investment for various funds, such as Philippine equity fund, technology fund and fixed-income fund.

“I think, on the average, the investment of GCash users is P8,000. It’s a good start because we also want our broader segment to invest,” BPI Wealth president and chief executive officer Maria Theresa Marcial said.

Meanwhile, through its UnionDigital Bank, Union Bank of the Philippines offers fully digital and AI-powered products and services to help even the seemingly income-less Filipinos.

Loans to those who need them most

“Offering loans to those without income is weird, but we’re finding a solution with the help of the government,” UnionDigital Bank president and chief executive officer Henry Aguda said.

He said UnionDigital Bank is also using alternative data to mitigate financial risks.

“We have an AI technology that tells us a customer segment is risky even before we lend money to that segment and without relying heavily on credit history from other banks,” Aguda said.

Aboitiz Data Innovation (ADI), an AI/data science firm and UnionBank’s sister company under the Aboitiz Group, said banks can use geospatial data and satellite data to offer home loans.

“If you’re closer to a cemetery versus a mall or a hospital, that’s an indication of your capacity to rent. How much are you willing to pay towards rent?” ADI chief executive officer Dr. David Hardoon said.

“This is the beauty of AI. You are able to use different types of information to make inferences. When you have enough viewpoints, you’re able to validate your assumptions and become a model for other companies,” he added.

At BPI, its team is developing a chatbot that will give clients more accurate answers to their questions in a more human-like way.

For entrepreneurs, BPI uses AI to analyze highly localized data.

“We take economic data and profitability of stores. For example, we can now tell where we can open a branch that serves MSMEs,” Limcaoco said.

Targeted shopping, rewards

Global payment solutions provider Visa is educating banks on the use of tokens which help consumers experience personalized shopping, protect financial data, and complete their shopping faster.

“Visa is working closely to support everyone in the ecosystem to introduce and grow this technology in the Philippine market so our payments ecosystem can see the same benefits of tokenization as some of the other markets have witnessed,” Visa head for product and solutions for Southeast Asia Poojyata Khattar said in email to the DAILY TRIBUNE.

She said tokens which are digital and AI-powered data tools provide several benefits to consumers.

First, tokens allow users to make transactions without having to manually input their payment credentials every single time. Second, tokens replace sensitive cardholder information. The technology disables sharing of consumers’ data with merchants and banks without the former’s consent expressed on the bank’s mobile app. Third, if the consumer agrees to share his or her data with merchants, the former can receive recommendations on other products they can buy online. Last, tokens shared with banks allow their clients to easily review the merchants or other companies that obtained their data.

While Visa has distributed 1 billion tokens across Asia Pacific, Khattar said the Philippines has yet to catch up on adopting the technology towards safer and more personalized online shopping. Visa shared that it has been developing token features for a decade.

“Tokenization is still in the initial stages of adoption in the Philippines. Growing digital penetration especially among the younger generation will drive a greater demand for a more seamless and secure payment experience,” she said.

Tokens are now being used through Apple Pay and Google Pay.

To increase the usage of tokens, Khattar said Visa is aggressively conducting literacy activities for all stakeholders.

“We also have to consider the different levels of readiness across our different partners — including banks/fintechs who issue our cards, as well as merchants and their acquirers — as it truly is an ecosystem effort,” she said.

Visa added it is urging businesses to upgrade their technologies so they can thrive amid the growing e-commerce industry which is always threatened by cybercrimes.

Update of payments infra

“Aside from the growing demand for improved payment experience, a necessary factor to drive the adoption of tokenization is updating existing legacy systems with new payment infrastructure that supports tokenization --- software and devices to support next-generation digital technologies,” Khattar said.

The Department of Trade and Industry (DTI) said e-commerce in the country expanded by 58 percent to $7.5 billion from 2019 to 2020. By 2030, it said growth could reach P14.3 trillion or $285 billion which is equivalent to 26 percent of gross domestic product.

EastWest Banking Corp. already uses tokens and boasts of its app with NFC or near-field communication technology as the first in the country.

The app is a contactless, cashless and direct payment that draws funds from its customers’ credit cards for faster electronic payments and hassle-free shopping abroad.

“Filipinos have shown increasing interest in virtual banking because of convenience and 24/7 accessibility. In other Southeast Asian countries, cashless payments have become the norm. We’re joining Singapore, Thailand and Malaysia as early adopters of this technology,” Jeffrey Navarro, Visa country manager for the Philippines, said.

A survey conducted by EastWest for a year showed 82 percent of the respondents tried cashless payments and 40 percent of them said the transactions were successful. The majority or 55 percent said they could live without, while 50 percent said they were already carrying less cash.

At BPI, its team is enhancing Vybe, a rewards app, to offer customers only the products and features they will find delightful.

“We won’t launch something if we cannot do it right. One of the concepts we have for Vybe is to keep it light as phones have capacities as to how much you can download,” Limcaoco said.

“We don’t like to call it a super app because it has many things that we don’t use. You only use maybe 20 percent of your app. Think about Grab, for example. Maybe, you use the ride and food services but it has other things it can do,” he explained.