Tonik gets digital-only banking license from BSP

Singapore-based Tonik Financial Pte. Ltd. is debuting into the Philippine banking scene this year as the first recipient of digital-only banking license from the Bangko Sentral ng Pilipinas (BSP).

The license is seen to enable Tonik to provide a full range of retail banking services, focused primarily on retail deposits and consumer loans, through a local branchless banking platform, targeting a critical mass of young, technology-savvy populace.

“Digital-only banks globally have successfully demonstrated their ability to take massive market share by launching hyper-compelling consumer propositions, while also operating at disruptively low unit costs, and thus generating outstanding returns

on assets and equity,” Greg Krasnov, Tonik founder and chief executive officer, said in a press statement.

“We are honored to have been chosen by the regulator as a test partner in bringing these global best practices to the Philippines through the first digital-only bank license in the Philippines and indeed Southeast Asia. We believe that the regulator’s confidence in us serves as the testament to the unique strength and track record of our team and the attractiveness of our product philosophy. We look forward to bringing a new level of digital banking services to the Filipino clients,” Krasnov said.

Krasnov had founded, built and sold a major consumer finance bank in Eastern Europe, Platinum Bank, backed by global investors. He likewise cofounded four market-leading fintech startups in Asia: CredoLab, AsiaCollect, AsiaKredit and SolarHome.

Tonik believes the Philippine banking sector was ripe for a digital disruption, in line with the trend in other markets, where digital-only “neobanks” have rapidly captured millions of customers and attracted over $5 billion of global investor funding in the last two years.Digital banking prospects are seen bright for the Philippines, a country where the median age is 24 and most people have high daily internet and social media engagement. The Philippines is seen to represent a $140-billion retail deposit market, and a $100-billion unsecured consumer lending opportunity.

The unbanked account for over 70 percent of the adult population while market research suggests that over 50 percent of existing bank clients would be willing to switch their deposits to a pure-play digital banking provider.

Chuchi Fonacier, BSP Deputy Governor for supervision and examination sector, said: “Aligned with the BSP governor’s drive of bringing the central bank closer to the Filipinos, we have consciously worked on ensuring that we maintain an enabling regulatory environment for responsible new financial system players. We have always welcomed players who offer reliable and inclusive financial services through innovative solutions.”

“Thus, it is with great optimism that we welcome Tonik Bank in the Philippines and we look forward to exciting digitally centered products and services and committed efficiencies that will benefit every Filipino,” she said.

Tonik’s senior team members have previously built and scaled multiple digital and retail banks and fintechs across global emerging markets. —Doris Dumlao-Abadilla INQ