In 2019, the number of unbanked Filipino adults was estimated at 51.2 million out of a total adult population of 72 million, considered a very low banking penetration rate in the world.

The BSP’s Financial Inclusion Survey in 2019 showed that 53% of adult Filipinos are savers, saving money at home.  While account ownership has improved in the last two years, more than two-thirds of Filipinos still lack access to a formal bank account.

A positive development of the pandemic is that many opened bank accounts through digital platform to receive cash assistance from the government. BSP Governor Benjamin Diokno said that about 8.0 million new accounts were opened digitally last year and more expected to be opened.

Digital banks and fintech companies can improve financial inclusion as they have their unique methods to provide for clients’ needs. The presence of new players in the market will increase competition, which will lead to better services for banking customers. Clearly, a step in the right direction.  

In a recent forum, Wick Veloso, BAP and PNB president ,said that having a bank account is important to achieve financial goals, a safe avenue to store hard-earned money.  He asked, what does financial inclusion mean to a farmer’s market tindera? Banking should be made as accessible as possible. This includes making it easier to open an account, allow online applications and make documentary requirements simple.

In addition, banks can best attract to open an account by providing products and services that cater to their specific needs. With lockdowns, the need to purchase and pay for products and services online present opportunities for bills payment and electronic commerce.

Mr. Veloso said: Authorities see that Filipinos will benefit from new digital bank players offering more affordable financial products and customized financial solutions that are responsive to the diverse and changing needs of the market. For example:

• Acquire a new home with insurance online
• A personal finance app that recommendations on investment options, career planning, and job opportunities 

Another opportunity with this digital shift is that it will hasten the integration of the physical and digital processes. The more data are collected from physical processes, the more these will be used to enhance risk assessment, validate identities, and optimize product distribution.

Also, important is to enhance credit risk profiling for those who work with the unbanked to serve their financial needs. Banks may offer better terms than informal lenders (e.g. loan sharks), such as lower interest rates and the option of renegotiating payment terms. Aside from loans and deposits, banks should highlight investment products to serve as an additional source of income for clients.

The faster adoption of technology is quickly changing our society, making improvements in the way we transact with one another. Easier, faster, and safer are what customers are looking for in the new normal.

Mr. Veloso also warned that there are risks as we journey towards digital transformation; the so-called “bad actors” – the cybercriminals and fraudsters. And as more and more use digital platforms for financial transactions, these “bad actors” are building plans for the biggest heist. Today, banks are no longer exposed to robbers storming the banks with a gun and asking for cash. The cybercriminal can be nearby or halfway around the globe, in his computer transferring money out to move to his account.  The banking industry responds through substantial investments on technological capabilities and aggressive awareness campaigns. Key advice: Don’t open if you don’t know the source.

Let’s not just survive in the new normal but thrive. Let’s keep our teams, our organizations in shape to prepare for the “revenge activities” and capture the opportunities of the recovery ahead.

It’s all about the best customer experience. The platform and players that will require the least physical requirements will win more business and markets, he said.

After experiencing lockdowns, customers who have opened an account, remitted funds, shop and paid online in the convenience of wherever they are will continue to do so. If you haven’t done mobile app yet…do start now.  It’s so easy, simple and convenient!

Hopefully, in our own little way, bankers will be able to help Filipinos achieve their financial and personal goals. ANGAT LAHAT. Walang Maiiwan!

Ms. Tarriela was the first Chairwoman of the Philippine National Bank. She was the first and only independent director chairwoman in the commercial banking industry. She is a former Undersecretary of Finance and the first Filipina vice-president of Citibank N.A.  She is a trustee of FINEX and an Institute of Corporate Directors fellow.

A gardener and an environmentalist, she established Flor’s Garden in Antipolo, an ATI Accredited National Extension Service Provider and a DOT Accredited Agri Tourism Site.

(The views expressed herein do not necessarily reflect the opinion of these institutions.)

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