Pandemic reverses reluctance in online banking, fintech: J.P. Morgan

ABS-CBN News

Posted at Aug 10 2021 11:45 AM

MANILA - The COVID-19 pandemic has accelerated the growth of online financial services, reversing the reluctance of both banks and the consumers in the previous years, J.P. Morgan's Co-head of Asia for Financial Research Harsh Modi said Tuesday.

There is a "significant increase" in the adaption of online services as people were unable to leave their homes due to pandemic restrictions or the fear of being infected, Modi told ANC.

Aside from e-commerce, fintech and online payments have grown, he said.

"The need has been there for a long period of time but what we’ve seen let’s say, over the last couple of years, was banks were reluctant to invest meaningfully, and also customers were reluctant to use online channels. For the last 18 months, that has changed," Modi said. 

"We have seen a very significant acceleration of the shift in favor of banking and all the banks have basically risen to the occasion in terms of providing all those channels for customers to transact in a very seamless manner," he added.

Modi said the Philippines is in the "early phase of evolution" of its adaption of financial services and online payment but the technology-driven means could be the "most dominant" in the country in about 3 to 5 years.

In the last 20 months, the growth rate has been "quite phenomenal" with user growth at 40 to 50 percent in terms of online banking customers, he said. 

The Bangko Sentral ng Pilipinas is also pushing for the adaption of digital payments under its National Retail Payment System (NRPS) with InstaPay and PesoNet. 

A framework for digital banks has also been released earlier, allowing neobanks to set-up shop in the country. So far there are 4 licensed fully digital banks in the Philippines, the BSP earlier said. 

BSP Gov. Benjamin Diokno said the country's digitalization goals include digitalizing at least 50 percent of payments and encouraging at least 70 percent of the population to open bank accounts by 2023.

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