Benefits of Digital Banking

Digital Banking: Is Philippines Ready?

Digital Banking: Is Philippines Ready? 768 487 Exist Software Labs

Digital banking is not news to the banking and finance industry in the Philippines. However, the industry has been in wait-and-see mode when it comes to adopting the concept. Furthermore, Decision-makers in the field are indecisive about taking the risk of diverting a larger portion of their investments to this.

Innovators, nonetheless, see the market’s promise. Ere the outrage of COVID19, actors intend to push this innovation and establish a position in the Philippine market.

In an interview with the CIMB Bank Philippines CEO Vijay Manoharan last January 2019, he took a solid stance on whether or not the country is ready for digital banking.

“This market is poised for digital transformation. It is great because the population is young. We got smartphone adoption and mobile banking penetration that are encouraging and growing rapidly. The consumers are ready. Consumers are looking for a digital banking solution. Coupled with a great regulatory framework, that will encourage digital adoption in banking. 

All these key pillars or indicators led us to believe that it is the right time to do something like this in the Philippines.”

In addition to this, the country also has a significantly large populace of unbanked individuals.

Congruent to what Mr. Manoharan said, the Philippine market is at its fruition to surf the tides of digital banking technology. The number of users has grown to millions in only a year.

How does the country forward digital banking locally?

Currently, the Philippines is on its way to becoming the next country to issue digital banking licenses. This regulation is part of Bangko Sentral ng Pilipinas’s three-year digital payments transformation roadmap, which seeks to promote financial inclusion.

BSP has initially set a goal to increase the share of electronic payments to 20 percent of total payment transactions in the country by 2020. According to BSP Governor Benjamin Diokno, the quarantine measure implemented throughout the Philippines boosted the realization of this goal.

There certainly has been a sharp decline in physical transactions. Subsequently, the surge in electronic banking activities changed the initial goal to about 50 percent of total transactions by 2023.

The tremendous market potential, combined with the local regulations, makes the path towards digital transformation in banking a lot smoother.

Going digital is always a user’s option. 

The ascendance of digital banking into the limelight nowadays became an avenue for redefining the industry’s focus. Therefore, whether the country is ready for this or not is no longer a hanging question.

Digital banking’s viability can withstand and sustain the post-pandemic financial ecosystem. For banking and finance tycoons, it is a race. Tapping the market with this technology’s interoperability is the goal.

Exist fosters a future-ready digital banking technology that equips its banking and fintech partners with the agility to adapt to ever-changing market demands.

The Future of Philippine Banking

The Future of Philippine Banking 768 487 Exist Software Labs

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As the impact of COVID19 on health and the economy continues to persist, key actors, including the banking sectors, create ways in an attempt to sustain the country’s survivability. Recently, the Philippine government launched the 4-pillar socio-economic strategy. The first two of which deals with the urgent needs of the vulnerable sectors and the medical industry. Whereas the second half is for economic recovery.

Banko Sentral ng Pilipinas also launched the Sustainable Finance Framework. It includes driving digital banking and financial inclusion, which anchors upon the fast spread of digital transactions. Since the implementation of the country-wide quarantine protocols, around 4.115 million digital accounts were created among banks and e-wallet platforms. Benjamin Diokno, BSP governor, said in a virtual fintech forum last May that the share of digital transactions should reach at least 50% by the end of his term in 2023. 

The central bank sees the exponential growth in numbers as an opportunity for the banking and finance sector to seize the hype and cater to the growing desire for digital payment solutions.

Case on point, Rizal Commercial Banking Corporation’s (RCBC) President and CEO Eugene Sering Acevedo stated in an interview with the Oxford business group that RCBC’s mobile app users increased by 10% between mid-March and mid-May alone. This change causes RCBC to consider closing some underutilized branches while investing more in its digital services. He also added that the bank’s management is highly focusing on digital targets and key result areas.

The stretch of the time that the country is under quarantine drastically decreased banks’ brick-and-mortar operations. Because of this, more and more users to migrate online. ATM usage has also declined by 25% since the beginning of ECQ. Such push banks to leverage on improving the customer service and digital experience.

The PwC highlights the significance of keeping the bond between the banks and its stakeholders, especially the clients, warm during this time of economic crisis.

According to them, banks may want to consider the following to keep client relationships healthy and customer-service managed:

      • Proactively reach out and offer training to customers who are not familiar with online banking. No client must be left behind during the evolution that is befalling in the banking sector. Banks should assist their clients through this change, particularly those who find this transition not easy.
      • Combine human and digital touchpoints in attending to customer concerns and needs. Banks should extend their services beyond person-to-person interaction. They should be able to address customer concerns through different channels, including online chats and emails.
      • Train customer service personnel to better prepare them for interacting with borrowers with dignity and respect during this stressful time. Building customer trust is imperative during this struggling time as it will leave a lasting impression on them and will speak of the wholistic values that the bank upholds.

The pandemic has created a ton of problem areas in our economy. Nevertheless, banks should grab the opportunity to grow and adapt swiftly to modern demands accelerated by the health crisis and establish a robust and more sustainable means of their services.

Going full-on digital is the future of Philippine banking, and that future is fast approaching.

Exist Software Labs, Inc. is committed to extending our assistance to several banks with their Digital Onboarding requirements. We have been in the business for 19 years, and the mission to enable corporations to go on digital and have a competitive advantage in this fast-changing world is at our core.

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What Sparked the Emergence of Digital Banking

What Sparked the Emergence of Digital Banking 768 487 Exist Software Labs

As we live in the computer age, the existence of online banking appears ordinary to us. Every major bank tailors a system that is capable of online access. The absence of such is almost unimaginable, especially these days.

The evolution of digital technology presented an invaluable advantage to banks as it attempts to address the limitations that the old brick-and-mortar set up brought to sight.

These limitations sparked the emergence of digital banking.

1. Building cost.

Before the rise of digital banking, the banking sector depends on expanding its branches to reach out to a broader market. But the hefty price of building a bank branch is one of the major turning points of gradually moving online. 

More than just the amount the land and construction of the building per se, establishing a physical branch takes into account the landscape/exterior, interior design, technologies, and devices to be used, as well as the security measures to be implemented. Banking businesses, therefore, target building a facility in commercial areas. This scenario creates a boundary between the banks and the possible market from far-flung places.

2. THUS, limiting the bank’s presence in many areas.

The first limitation springs another one. Banking was less accessible to most people outside business districts. Additionally, a physical branch can only attend to as many clients as the store, and its personnel can accommodate.

As banking became more present in the digital ecosystem, the market also had more inclusion. It also fostered a better synergy. Banks can swiftly respond to concerns as fast as users can address their concerns.

3. More customers require more bank employees.

Even before the rampancy of digital banking platforms, banked individuals have always kept increasing, the implementation of digital technology in this industry only accelerated this increase significantly. A corresponding increase in bank staff always comes after the constant growth, or forecasted growth, in the number of banked individuals. The same goes for adding more physical stores.

Digitization allowed processes to speed up as most of it is being automated. This induced changes in the traditional workforce requirements of banks. With the decrease in the need for human supervision in many operations, banks can now concentrate their forces on their core competencies.

4. Incoherent customer journey.

The improvements in the customer journey that digitization presented were also promising. The customer journey begins with awareness. But where does it end? The simple answer is it never does. Continually nurturing the clients even after you have acquired them is one of the most critical steps, if not the most, in rendering a fulfilling journey.

Think of having to do every step of this journey physically. Tedious, right?

Digital banking broke this stigma. The targeting, marketing, acquiring, and now even responding to the market became a lot easier, delivering a more personalized and customer-centric experience.

5. Consumers are online, so should banks be.

The evolution of digital banking expands from the creation of ATMs to going online. Why not? The market is rapidly becoming more inclined to the internet, and they want to accomplish things faster than ever before. The screens became the window to what the world has to offer, either convenience or luxury.

One of the fundamentals of running a business is placing it to where your target segment is situated. The rationale is pretty simple: you should be where your prospects are – keep within the sight. Banks get to be where their market is, a superpower that brick-and-mortar cannot grant – OMNIPRESENCE.

Digital banking was able to hit these pain points and is anticipated to keep driving notable changes in this age, especially as the global health crisis accelerates the demand for more digital services. The current condition advanced the call for virtual collaboration, thus the innovation of the virtual platforms. It is inevitable. It is only a matter of who is going to be the pacesetter – the one at the front of the transformation race.

Exist Software Labs, Inc. is committed to extending our assistance to several banks with their Digital Onboarding requirements. We have been in the business for 18 years, and the mission to enable corporations to go on digital and have a competitive advantage in this fast-changing world is at our core.

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