BPI aims to lead digital banking market

Published August 2, 2021, 6:21 PM

by Lee C. Chipongian

Ayala-led Bank of the Philippine Islands (BPI) is competing in the digital space as is, not as a formal digital bank, via a suite of apps for each customer segments to get as much of the growing digital market in less time, according to its president and CEO, Jose Teodoro “TG” Limcaoco.

Limcaoco said BPI is launching two additional apps this year, and two more in 2022, to add to its existing three digital solutions. He reiterated that they do not need a digital bank license to acquire or service existing online-only clients, that their future seven apps would do the job.

Jose Teodoro “TG” Limcaoco

“My thinking right now is we don’t necessarily have to apply for a digital banking license because our operations at BPI and at BPI BanKo (small bank arm) are digital already. So, we can do anything that a digital bank can do. There is no need for a specific license for a digital bank,” he told a press briefing Monday.

The 170-year BPI currently has the EOL or BPI Mobile for retail, the Biz Link for top corporates and BanKo for their self-employed and micro-entrepreneur customers. “By the end of this year we should have two more, one for SMEs and one which is a customer loyalty and rewards app that will have a payment capability. By next year (2022) we have plans to have two more, they will tap different customer segments and different customer needs in different businesses. If you look at best practices around the world, you will see what will complete our suites,” said Limcaoco.

BPI is also introducing “mini apps” for mini digital solutions tailor fit for what some of their clients require. “We have these simple solutions (but) they are not really apps,” he added.

About 90 percent of the bank’s transactions are already digital. Branches in past months have recorded a 30 percent to as much as 70 percent drop in transactions, mainly because clients have gone digital amid the COVID-19 lockdowns.

In the meantime, Limcaoco said BPI’s next apps will offer more convenience such as allowing their SME clients to use the instant messaging platform Rakuten Viber for their transaction payments. The upcoming app for SMEs will have the ability to “collect and get paid via Viber” by SMS linking to the new BPI app.

“We don’t want a single app to cater to all our clients. That doesn’t work,” said Limcaoco. “We have many clients with different needs so we’ll create for those different needs. We are working with many, many partners to complement what we have.”

BPI’s mobile or e-wallet partners use their application programming interface or APIs to fund themselves, such as its sister company, financial technology firm, GCash. Plans are underway to offer consumer loans such as credit card promos, investments, insurance and even the opening of new accounts through GCash.

“We’re also looking at other partners including PayMaya (and to sell) some of our products in places like Shopee, believe or or not,” he added.

BPI is prepared to lead a competition-heavy digital market. Limcaoco said he has observed flows from BPI to competing digital banks but the volume is not yet something to be concerned about. “But we need to watch them,” he said, especially their business models.

For now, Limcaoco is confident that their apps and digital services such as its latest “new to bank” features which is a purely digital accounts opening, is better than most digital banks.

“It’s better and faster and easier than any of purely digital banks that are out there because I’ve tried all of them,” he said. “We will be launching this formally with a full campaign in the next week or two weeks. We have soft-launched it middle of June and we already have thousands of accounts that have opened and funded.”

Limcaoco said with COVID-19 still around, and evolving, BPI is also continuously developing new ways of servicing their customers via digital means.

“Is the worst over? I think it is,” he said, referring to the pandemic’s impact on the banking industry. “Our borrowers have adjusted, we are looking at manageable NPL (non-performing loan) levels going into the end of the year and into next year. Of course this is all presupposed on the Delta variant being something that we can control, and I think we can, as we get the vaccination program up to speed and people cooperate with the government on the lockdown.”

Limcaoco said the return to the stricter lockdown period this month is a setback, but he is hoping it is not a “too great” complication. “Mortgages and car loans are growing. We’re seeing interest in credit card transactions, even SME banking is beginning to pick up. But top corporates are still weak because they raised their cash last year. Hopefully, the ECQ does not last very long,” he said.

Back in April, in his first press briefing as CEO, Limcaoco who is a homegrown BPI executive, said the bank is spending P10-11 billion for its IT and cybersecurity investments, as they go all-out digital going into 2022.

BPI has more than eight million clients and some three million unique active users of its online and mobile apps.