Yuchengco-led Rizal Commercial Banking Corp. (RCBC) is set to launch this January a new virtual banking platform as part of a digital roadmap that aims to reach the retail grassroots and bring in about a million new customers by 2020.
In a press briefing Wednesday, RCBC executive vice president and chief innovation and inclusion officer Lito Villanueva said the launch of the all-digital banking unit would be part of RCBC’s financial inclusion accelerator platform “DiskarTech.”
Last month, the Liga ng mga Barangay sa Pilipinas passed a resolution embracing DiskarTech, paving the way for the rollout of this program to 42,000 barangays across the country.
“Customer onboarding will be at the barangay level,” Villanueva said. “This is something that will really propel the country to a truly digital economy.”
The virtual bank would be launched as a product of RCBC “but … within the context of a traditional way of banking,” Villanueva said. He noted the new virtual bank could thus have a different backroom from the parent bank. This is for unbanked customers who want the same services but do not want to deal with traditional banks.
The launch of a virtual bank is seen to allow RCBC to reach out to a bigger retail market base and serve low-income segments. These could comprise of accounts with an average daily balance of P800 to P1,000.
Adding about a million new retail accounts in a single year will immediately expand by a third RCBC’s existing client base of over two million customers.
The virtual bank will also offer basic services like deposits, lending and insurance.
For deposits, Villanueva said the group could compete in terms of offering attractive interest rates. Many banking groups that have launched all-digit banking platforms, like ING and CIMB, have been offering very high interest rates.
As a whole, Villanueva said RCBC was building the ecosystem to bring in new technology and innovation, in line with his own task of making the group more agile in view of disruption from financial technology (fintech) firms. RCBC is not keen on building its own fintech arm but is instead tapping a “surplus” of fintech providers in the country, according to Villanueva.
Later this week, RCBC will also relaunch its mobile app that will introduce three new features for online and mobile banking: a facility for foreign exchange serving 10 currencies; as platform to receive time deposits of as much as $200,000 and P10 million; and e-gov Bureau of Internal Revenue payments channel through Pesonet and Landbank.
About 38 percent of RCBC’s existing customer base is now using online mobile digital banking channels.”If you are to be aggressive about it, we can reach 50 percent in less than two years,” Villanueva said.
RCBC’s role model on digital banking is BBVA, a Spanish multinational banking group, which Villanueva deemed as “one of the more progressive digital banks in the world” and one that has built successful operations in multiple markets.