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Philippines: More banks keen on digitalization
MANILA, Philippines — More banks are keen on using technology-enabled solutions and are exhibiting strong interest in participating in the digital finance ecosystem, according to the results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP).
According to the survey, about 87.4 percent of respondent banks have plans to use technology in banking transactions, higher than the 73.5 percent recorded in the previous survey.
“The survey results showed that technology and operating models are most applicable in addressing brand management and margin pressure. Likewise, technology and operating models were also deemed useful in enhancing customer experience and expanding client base,” the BSP said.
It also said the finding is consistent with the 13.1 percent rise in the value of electronic money (e-money) transactions processed by banks to P752 billion from January to October last year from P664.8 billion in the same period in 2018.
The survey also showed that a third of the respondent domestic big banks that intend to use technology indicated that 21 to 40 percent of their banking transactions would be conducted through the use of digital technology in the next two years.
Moreover, 35.3 percent of foreign universal and commercial banks said that more than 80 percent of their banking transactions would utilize digital means.
The percentage is even higher as 61.9 percent of stand-alone thrift banks mentioned that 21 to 60 percent of their banking transactions would be conducted through the use of digital technology.
However, the fintech strategy of rural and commercial banks is fragmented in the biggest group as only 28 percent of the respondents indicated that 10 to 20 percent of their banking transactions would utilize the internet, mobile phones or other electronic means.
Furthermore, banks tagged data security and privacy, know your customer (KYC) procedures and loan scoring as the most important concerns.
For the two consecutive semesters, data security and privacy continued to be the topmost important technology application for big and small banks alike.
Meanwhile, deposit services emerged as the most important application of technology for thrift banks from data security and privacy in the previous semester.
Likewise, the result of the survey showed that 59.7 percent of banks are prepared to handle and manage cyberthreats, down from 65.1 percent in the previous survey.
“The decline maybe attributed to the increase in the number of respondents from rural or cooperative banks in which 40.4 percent revealed that they are somewhat prepared in dealing with cybersecurity risks and threats,” the BSP said.
Meanwhile, 14.3 percent and 22.7 percent of the respondents expressed that they are very prepared and somewhat prepared in managing cybersecurity risks, respectively.
About 68.1 percent of surveyed banks indicated that financial losses as the most worrisome in terms of the impact of cybercrime events followed by breaches on customer data and reputational risk.
BSP Governor Benjamin Diokno said the BSP is committed to achieve at least 50 percent of retail payment transactions shifted to digital and 70 percent of adult Filipinos having and using a transaction account by the middle of 2023
Source: https://www.philstar.com/business/2020/05/26/2016450/more-banks-keen-digitalization