MANILA - Financial technology and digital industry players welcomed the Bangko Sentral's approval of a digital banking framework, as part of efforts to extend financial services.
"We are seeing more foreign technology players coming in and traditional banks levelling up to be at par with the increasing competition towards creating its own hybrid neo-banks. These developments present an expansive array of choices to consumers. Consumers are the ultimate winners. At the end of the day, it is all about delivery of awesome customer experience and unique value proposition," said Lito Villanueva, Fintech Alliance.PH chairman and RCBC's chief innovation and inclusion officer in a statement.
The Philippine central bank on Thursday approved rules allowing the creation and licensing of digital banks as consumers increasingly turn to the virtual realm for banking.
The Bangko Sentral expects at least 50 percent of payments will shift to digital by 2023, with 70 percent of adults using a digital transaction account by then, giving consumers more options and steering them away from loan sharks.
Under the framework, digital banks would be a distinct classification of lender. Digital banks would offer financial products and services that are processed end-to-end through a digital platform and/or electronic channels with no physical branches, the central bank said.
Digital banks should set up a headquarters in the Philippines for management and support operations, including the handling of customer concerns, the central bank said.
The central bank's policymaking department may limit the number of digital bank licenses, depending on the applications it gets.
"The BSP is looking to attract players with strong value proposition, sufficient financial strength, technical expertise of management and effective risk management," BSP Governor Benjamin E. Diokno said.
Foreign banks CIMB and ING Bank have launched digital banking platforms in the Philippines.
The central bank's payment settlement facility processed 5,000 transactions valued at 2 trillion pesos ($41.6 billion) daily in the first half, triple the daily average for 2004 to 2007, central bank data showed.
--with a report from Reuters