'High tech, low touch' is new normal as banks see economy through COVID-19

MANILA -- A self-confessed "old fashioned" boss, Bank of the Philippine Islands President Cezar Consing admits to working in the office instead of at home every other day during the COVID-19 lockdown, as he looked ahead to the new normal when most transactions are done digitally.

Last week, 90 percent of transactions at BPI were made through its mobile app, ATMs and cash accept machines and only 10 percent were over the counter. Half of BPI clients access the bank digitally, he said.

"Digitally, clearly, is the present and it's the future," said Consing, who is also president of the Banker's Association of the Philippines.

From being "high tech and high touch," the pandemic is accelerating banks' plans to transact with "low touch," he told ANC. "Filipinos are such a great high touch people, it will be an adjustment."

Luzon, home to half the Philippines' 100 million people, has been on lockdown since March 17, shutting most businesses except supermarkets and pharmacies. Banks kept some branches open.

Consing said his work from home experience "didn't work out so well." He added: "I need a lot more support than most millennials."

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Philippine National Bank President Wick Veloso said that since the lockdown, video conferencing with branches that are running have become part of his daily routine.

"It's going to change significantly, our way of working after the lockdown," Veloso said.

"What is important for us right now is to convert our passbook holders into mobile banking users," he said, adding it would come at a "significant" cost.

CONSUMER, BUSINESS PAIN

Standard Chartered Philippines CEO Lynette Ortiz said she had been on the phone a couple of times with Bangko Sentral ng Pilipinas Deputy Governor Chuchi Fonacier, discussing its "aggressive" measures to aid the economy.

Since the lockdown, the BSP slashed 100 basis points off the benchmark interest rate bringing it to 2.75 percent, cut the reserve requirement ratio for banks by 200 basis points and bought P300 billion in government securities.

Standard Chartered, which handles corporate clients in the Philippines, is helping businessmen manage the risks brought about by the pandemic, she said.

"It's really balancing our internal and external stakeholders," Ortiz said.

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Veloso said the Bangko Sentral's move would allow banks to offer more loans and provide relief to consumers.

"We need to have a dual approach, where you need to have the banks have liquidity, and to have sufficient interest rates that are attuned to the times," he said.

With many businesses closed, consumers are under stress as they need to catch up with their loan obligations, he said. "We are going to see the situation a lot clearer as the lockdown gets to be over."

CONFIDENCE IN THE ECONOMY

Consing said that with capitalization "quite high," Philippine banks are poised to weather the economic fallout of the pandemic.

"But when your customers suffer, banks see it in NPLs (non-performing loans)... Hopefully, the banks are strong enough to withstand it," he said.

"The ability of the banks to get back to the old norm is a function of when the customers go back to the old norm," he said.

Ortiz said it could take a year for "normalcy" to return. She said the pandemic would also give an opportunity to rethink investments and consider health and logistics.

The challenge for banks, Veloso said, is restoring faith in the economy.

"At the end of the day, it's consumer confidence. We need to be able to bring it back. Consumer confidence will bring the economy back on its feet," he said.

Catch the full interview on ANC on Monday April 28 at 8 p.m. after TV Patrol as The Boss looks ahead to the new normal for the economy with the COVID-19 pandemic.