The banking industry remains optimistic on the country’s economic prospect amid global uncertainties and market volatilities based on the results of the Banking Sector Outlook Survey (BSOS) of the Bangko Sentral ng Pilipinas for the first semester of 2019.
Majority of the BSOS respondents projected the gross domestic product (GDP) to grow between 6 percent and 7 percent within the next two years.
Similarly, the outlook on the Philippine banking system (PBS) remains stable, with most of the BSOS respondents projecting double-digit growth in assets, loans, deposits and net income.
The bullish outlook on the banking system indicates that banks will continue to provide an environment conducive to the sustained domestic economic growth.
The new BSOS section on Fintech/Cybersecurity Plans underscored the banking industry’s aptitude on the use of technology-enabled solutions and strong interest in participating in the digital finance ecosystem.
This is expected to add further impetus to the growth and operational efficiency of banks.
The report also noted that most of the banks planning or already employing technology in their operations find its most important application in areas of data security and privacy, know your customer (KYC) procedures and loan scoring.
Moreover, most of the respondent banks revealed preparedness in managing cybersecurity risks.
Meanwhile, institutional risk was considered as the top concern to the banks’ operation which include cybersecurity threat, regulatory/compliance risk, credit risk, and market competition.
Respondent banks considered enhancing their risk management systems to strengthen the banks against potential shocks and external vulnerabilities.
Likewise, they planned to strengthen client relationships and upgrade personnel capabilities.
Banks also recognize the need to keep a high level of risk-based capital and liquidity; and to strengthen organizational conduct and risk culture in order to thrive amid the volatility and complexity of the operating environment.
The BSOS provides insights of bank management on the strategic direction of the industry and emerging risks and trends.
This is part of BSP’s surveillance tools in promoting the resilience of the banking system.