The Bangko Sentral ng Pilipinas (BSP) will accept applications for more innovative digital banks next year, enabling consumers to choose from six to 10 digital banks in the country.
“Applicants must bring something new to the table. These offerings should have significant potential to reach broader clientele, particularly the untapped or underserved market segments,” BSP Governor Eli Remolona Jr. said in a statement released Thursday.
The BSP will open the application on 1 January 2025 for four more digital banks which can either be originally digital banks or shifting into digital banks.
With the additional digital banks, Remolona said the BSP can gain more insights on using digital banks to integrate all Filipinos into the banking system, helping them build wealth and fulfill financial transactions easily and safely.
“The BSP can closely monitor developments in the digital banking industry and obtain a broader perspective as these banks mature further in their operations,” he said.
The BSP temporarily closed the application for more digital banks on 31 August 2021 after authorizing six digital banks to operate.
They are Singapore-based Tonik Digital Bank Inc., UnionDigital Bank Inc. of Union Bank of the Philippines (UnionBank), and GoTyme Bank Corporation of Gokongwei Group of Companies.
The others are Maya Bank Inc. of Manny Pangilinan Group of Companies, UNO Digital Bank Inc., and Overseas Filipino Bank which is a subsidiary of government-owned Land Bank of the Philippines.
Under the new Digital Banking Framework originally created in December 2020, applicants must present unique value propositions, business models, and resource capabilities.
The BSP will assess these aside from the basic requirements: transparency of banks’ ownership and control structure, suitability of shareholders, fitness and propriety of directors and senior management, adequacy of capital, strategic and operating plan, and corporate governance and risk management.
Growing client base
The BSP announcement came after digital banks reported expanded client base and substantial profits.
Global business consultancy McKinsey & Company reported GoTyme Bank, UNO Digital Bank, and UnionDigital Bank posted a combined $3 billion increase in market value, higher than traditional banks’ $2.2 billion between January 2021 and January 2023.