PH digital banking transactions surged in H1

Digital banking in the Philippines is taking root as the volume and value of electronic payments and financial services processed through this nascent segment reached 1.4 million transactions and P8.45 billion, respectively, during the first semester of 2022.

According to the Bangko Sentral ng Pilipinas (BSP), all six of the so-called neobanks to which it granted licenses have now been given the green light for full operation.

So far, only three are now in full gear, namely Tonik Digital Bank Inc., Maya Bank Inc. and Overseas Filipino Bank Inc. or OFBDB, which is a digital banking subsidiary of the Land Bank of the Philippines.

Tonik and Maya were issued their certificates of authority to operate in the first quarter this year, and OFBDB in the second quarter.

The other three—UNObank Inc., GoTyme Bank Corp. and UnionDigital Bank Inc.—are expected to launch within the second semester of 2022.

UNOBank also received authorization in the second quarter this year, while GoTyme and UnionDigital received theirs in July.

The certificate meant that they are allowed to proceed with full operations as digital banks.

The BSP issues the certificate to digital banks that have substantially complied with the central bank’s conditions for approval and pre-operating requirements. These include capitalization, risk and governance structure, and information technology systems, among others.

UNOBank, UnionDigital and GoTyme have already started limited operations targeting select customers.

Operating initially under limited capacity is a conservative approach adopted by digital banks to further ensure that all aspects of their digital operations are ironed out prior to fully launching their services to the public.

The BSP defines digital banks as having no physical branches, unlike traditional or brick-and-mortar banks.

Also known as neobanks, these players’ financial products and services are processed end-to-end through digital platforms or electronic channels.