Local banks are in the sights of global fintech platforms provider, Intellect Design Arena, which targets the Philippines as a lucrative "strategic market".
Over the short term, in just in a couple of years, the company expects to haul in $10 million revenues per annum, around P546 million, from the software requirements of Philippine banks undergoing digital transformation, Rajesh Saxena, CEO, Global Consumer Banking, told Manila Bulletin.
Last year, Intellect Design Arena posted $250 million (P13.65 billion) revenues internationally.
To date, the company has the world's largest cloud-native, Application Programming Interface (API) - led microservices-based multi-product FinTech platform in Banking, Insurance and Capital Markets.
Alteady, the financial systems of more than 270 banks in over 57 countries run on its platform.
"The Philippines is a strategic market for us and we want to build our business here," Saxena pointed out. "We provide software and solutions for banks. We have the products and the platform to transform them. It's a win-win scenario."
**media**
Gone was the former reluctance of local banks to go digital, he confirmed.
At present, "We are in discussion with many large banks here and we expect to close those deals in a few months," he revealed.
Their current clients include the Philippine Business Bank (for digital core banking, deposit, savings and loans), Rizal Commercial Banking Corp. (RCBC), Philippine National Bank (PNB) and Banco de Oro (BDO) (for online cash management), as well as Citibank Philippines, UnionBank, Land Bank of the Philippines (LBP) and China Bank.
"Profits of banks are being squeezed and new digital banks are coming," according to the CEO.
Competition is cutthroat because it's now normal for one person to have two or more banks.
Because banks are fighting to have more share of the customer wallet, they need to pare down their costs, which they can only achieve by digitalizing their operations.
With the Bangko Sentral ng Pilipinas (BSP) pushing for open banking, "We have seen early signs of some local banks going into the cloud, both public and private cloud," he observed.
The Cloud provides elasticity, enabling banks to scale either up or down with ease. It also provides security and allows them to upgrade with no downtime.
"The Cloud provides the next stage of transformation for banks."
So far, local banks are already into digital onboarding, where they can sign up for an account anywhere, online, without the hassle of going to a bank branch, presenting documents and going through human verification.
Local banks are likewise into embedded finance, allowing tjem to placr a financial product in a nonfinancial customer experience, journey, or platform, such as the ride-hailing app Grab.
Banks are also beginning to harness analytics to maximize the massive customer data they have accumulated.
This year, the BSP targets to digitalize 50 percent of retail payments.
Still, lots of banks have to digitalize and many of them still don't have the capacity to do so, according to the CEO.