AUB chief: Tech catalyzes inclusion

With a population that continues to grow and a financial education that has now been more accessible, the country now has bank account holders who comprise the majority of the population, based on Bangko Sentral ng Pilipinas figures.

To reach more Filipinos, Asia United Bank (AUB) has taken a creative approach, thinking outside its physical branches and partnering with financial technology or fintech firms.

Being a relatively young bank that first opened as a commercial bank in 1997 and as a universal bank in 2013, AUB is capitalizing on its e-wallet HelloMoney to bring in more depositors, according to its president Manuel Gomez.

“Instead of relying on a large branch network, the bank is strategically partnering with trusted organizations to expand its reach and better serve Filipino consumers and businesses,” he said in an email to Daily Tribune.

HelloMoney has attracted over 6 million users since it was launched in 2019.

Just last month, AUB shared that 94,000 more Filipinos created their accounts through an e-wallet.

“We started HelloMoney with a simple yet powerful vision: to make banking as effortless as greeting a friend ‘Hello,’” Gomez said.

The bank is enhancing HelloMoney to offer microinsurance and digital savings with smart savings solutions, goal-based saving features, and automated savings options, according to Gomez.

“AUB aims to build a reputation for its constant innovation, expanded global reach, and enhanced user experience, in line with its steadfast mission to make financial services truly accessible to every Filipino,” he added.

With HelloMoney, users can buy prepaid loads, remit money through PeraPadala, pay using a QR code, settle bills, withdraw from ATMs, and shop online using its virtual Mastercard.

HelloMoney users can also manage their Pag-IBIG Fund accounts and perform banking transactions through the Hello Pag-IBIG app.

As an alternative, digital payment for transport, AUB also recently partnered with the Parañaque Integrated Terminal Exchange (PITX) which serves at least 150 million bus passengers a year.

Global payments option

In partnership with China’s Alipay+, HelloMoney allows Filipinos to pay merchants in Japan, Singapore, South Korea, Malaysia and Hong Kong.

This made AUB the first Philippine bank with an e-wallet that can be used for cross-border payments to massive groups of merchants in the aforementioned countries and territories.

E-wallet users just have to scan the QR code at stores that carry the Alipay+ logo.

Over 3 million Japanese merchants accept HelloMoney and Alipay+ payments, AUB said.

Partly due to HelloMoney transactions, AUB reported its non-interest income surged by 48 percent to P4.1 billion last year.

Aside from Alipay+, AUB tapped Atome, a digital lender in Southeast Asia, to provide consumers extra cash under a buy-now-pay-later (BNPL) method and through Atome Prepaid Mastercard.

Atome boosted its revenues by 45 percent to $280 million last year from 2023 through BNPL and digital lending platform Kredit Pintar in Indonesia.

The firm’s gross merchandise value jumped by 35 percent to $2.5 billion.

In November last year, Atome announced it secured syndicated credit of up to $200 million after a surge in its BNPL card transactions.

Before this, the financial technology firm had secured three-year credit of up to $100 million under its agreement with EvolutionX Debt Capital.

“We will forge strategic partnerships to help us further increase our customer base,” Gomez said.

“This addresses the needs of digital-savvy consumers and shows AUB’s adaptability in the evolving financial landscape,” he added.

Groundbreaking bank services

To help ease opening accounts for financial services, AUB developed the first fully digital registration for HelloMoney by integrating the National ID into the app.

“You don’t need a physical ID to open an account on HelloMoney because your face is now your ID,” Gomez said.

According to the Philippine Statistics Authority, 90 million Filipinos already registered for the National ID last year, representing 98 percent of the government’s target for that period.

Gomez added AUB offers the lowest fee of P8 for quick fund transfers through InstaPay and zero convenience fee for billers.

“These aren’t just features; they’re our commitment to financial inclusion,” he said.

As a motivation for innovation, Gomez said he is looking forward to the entry of more digital banks in the country.

On 1 January, the Bangko Sentral ng Pilipinas (BSP) opened the application for four more digital bank licenses in the country which will add to its six existing digital banks.

“We welcome this BSP policy as it will drive competition in the delivery of financial solutions to markets such as the unbanked and underbanked in rural and remote areas with limited physical bank access and low-income individuals who find traditional banking expensive or intimidating,” Gomez said.

Qualified new applicants are either local or foreign firms that want either to convert to a digital bank or already operating as such.

However, BSP Deputy Governor of the Financial Supervision Sector Chuchi Fonacier stressed that their products and services should be unique.

“They should address a very specific need of the market. They should also bring in very innovative business models and be able to walk us through their business models,” she said.

Upbeat economic outlook

Gomez said he is optimistic the Philippines can reach an upper middle-income status, supported by a robust employment rate and curious Filipino workers.

“Nothing is impossible as long as you want it and you work hard for it,” he said.

Gomez said the government and the private firms must collaborate to help Filipinos seize more job opportunities, leading to more financially secure Filipinos.

Ingredients for upper-middle economy

“We already have the essential ingredients to be an upper-middle income country: a young and tech-savvy population that is driving our highly adaptable and skilled workforce, and a potential for economic advancement with digital services and business process outsourcing as potential accelerators,” he said.

The bank’s financial performance last year shows Filipinos continue to remain resilient despite still elevated inflation, with an average of 3.2 percent or higher than the BSP’s minimum target of 2 percent.

In a disclosure to the Philippine Stock Exchange, AUB said its loan portfolio expanded by 26 percent to P245.4 billion compared to P194.5 billion in 2023.

Meanwhile, the non-performing loans (NPL) ratio hit its lowest at 0.3 percent. AUB said NPL coverage ratio remains sufficient at 113.7 percent.

Thus, the bank’s net income climbed by 36 percent to P11.3 billion.

Since it was publicly listed as a universal bank in 2013, AUB said its net income based on compounded annual growth jumped by 21 percent, among the country’s fastest.

AUB saw a better return on equity of 21 percent, up from 18.6 percent. Meanwhile, the return on assets improved to 3 percent from 2.4 percent.