James Patrick Q. Bonus l August 29, 2023 l Manila Bulletin
As of March 31, 2023, the cumulative deposits of the six digital banks—GoTyme Bank, Maya Bank, OFW Bank, Tonik Digital Bank, UnionDigital Bank, and Uno Digital Bank—have reached an impressive PHP 46.1 billion. Compared to the performance three months prior, this signifies a remarkable 29% increase. The upward trajectory in deposit growth is an encouraging sign – underscoring the Philippines’ transition toward embracing the digital-only banking model. Filipinos are becoming more accustomed with the convenience and efficiency that digital banks offer.
More Filipinos get access to banking services
Financial inclusion, as defined by the Bangko Sentral ng Pilipinas, is a state in which everyone, especially the vulnerable sectors, has effective access to a wide range of financial services. The objective of a digital-only banking format is to expand banking service providers by leveraging on Filipinos’ widespread use of mobile devices such as smartphones, as well as the growing ubiquity of consuming mobile broadband data. With digital-only banking, anyone can easily open a new deposit account or obtain a loan without having to worry about the physical location of the bank or its branches.
Broader access to loans and other credit products
One advantage that digital banks have over the incumbents is the ability to launch innovative ways of reviewing credit applications and lending through the adoption of nascent banking technologies, such as alternative data-drive credit scoring, or real-time know-your-customer digital evaluation. Traditionally, a prospective borrower must complete voluminous paper-based application forms and sub it extensive information regarding their employment history, income sources, and assets. Now, with digital banking on the rise, streamlined loan application processes are becoming the norm. Borrowers can complete their application online via the bank’s secure website or mobile application. This development broadens access to consumer financing, making financial services accessible to more Filipinos.
New ways to safekeep and invest funds
The delivery and accessibility of financial services have been revolutionized. Digital banks have opened up accessibility to loans, credit, investments, and other financial services like insurance.
Though many of our fellow Filipinos still remain either unbanked or underbanked, the growth of these digital banks have significantly bridged the financial gap. True financial inclusion is paved on the bricks of innovation and collaboration.
*** James Patrick Bonus is the Deputy Country Manager & Chief Finance Officer of FinScore, a fintech firm providing alternative data-based consumer credit scoring and identity verification solutions for financial institutions. Visit https://ccmobile.ph/establish-your-financial-persona to learn your telco credit score for free.