More than 4 digital banking slots may open up in 2025

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The Bangko Sentral ng Pilipinas (BSP) might consider increasing the number of new digital banking slots beyond the current limit of four if many applicants would manage to meet the stricter requirements.

The BSP will resume accepting applications for digital banking licenses starting 2025, in a bid to expand the industry that for now includes only six players: UNO Digital Bank, UnionDigital Bank, GoTyme, Overseas Filipino Bank of state-run Land Bank of the Philippines, Tonik Digital Bank and Maya Bank.

Speaking to reporters, BSP Deputy Governor Chuchi Fonacier said there is a “possibility” that the market would welcome more than four digital banks if assessments would show that many applicants deserve a license, including those fintech firms that would be required to get the proper permit for operating like virtual lenders.

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On the flip side, Fonacier also said the BSP won’t try too hard to fill all four slots if none of the applicants could meet the requirements.

“We’ll see once the applications start coming in and [after] our assessment of the existing ones doing a digital bank-like operation,” she said, adding that the policymaking Monetary Board would ultimately decide if there’s a need to increase the number of new licenses to be handed out starting next year.

As it is, getting a digital banking license won’t be easy this time.

The BSP had said only the applicants that show capacity to offer a unique value proposition — or develop new and innovative business models not offered by existing players — would be granted a digital banking license.

This is on top of the minimum capitalization of P1 billion and other prudential requirements that digital lenders must meet.
Already, Fonacier said the BSP has received queries from companies that are interested in joining the nascent industry, where attractive yields are firing up the competition for deposits, a major lifeline of banks.

“Even before the application period starts, we’re already entertaining questions, proposals,” she said.

”Of course, the proponents would already plan. We have already started engaging them,” she added.