The Bangko Sentral ng Pilipinas (BSP) has approved the creation of the country’s second telco-backed bank, which is expected to roll out innovative services in the area of wireless payments and microfinance products for consumers.
In a circular letter released this week, the BSP announced that mBank Philippines started operations in October.
This was a year after the BSP approved the creation of the bank.
The new thrift bank is owned by Smart Communications.
Smart Communications is the mobile service subsidiary of the country’s leading telco, Philippine Long Distance Telephone Co. (PLDT).
The new bank was registered with the Securities and Exchange Commission (SEC) last Sept. 3, and started operations on October 16.
According to the regulator, mBank’s main office is located in Sta. Rosa, Laguna. But the bulk of its operations will be done through mobile phones as it takes advantage of the expertise of its parent firm.
The new bank also recently started operations in Malolos, Baliuag, and San Jose in Bulacan.
The bank distributes and services financial products leveraging the airtime distribution network of Smart, which allows the company to expand faster and cheaper.
Using mobile phones, the company is able to allow its customers to open bank accounts or access loan products 24 hours a day, seven days a week.
Its services range from savings and loans to insurance products, which are currently being offered to Smart mobile phone subscribers and airtime load retailers.
Smart’s mBank was established with the help of Finnish development finance company Finnfund and Dutch development bank FMO.
Financial services delivered through electronic channels, such as mobile phones, are seen as an effective way to bridge the gap between the country’s formal banking system and the large portion of the population who are considered to be “unbankable.”
Only two in 10 Filipino households have savings accounts with banks, latest data from the the Bangko Sentral ng Pilipinas showed.