THE Bank of the Philippine Islands (BPI) aims to make banking easier and more convenient for clients through its seven digital banking platforms, each designed with a particular client segment in mind.
Noel Santiago, Chief Digital Officer of BPI, told Malaya Business Insight that these platforms will allow clients to manage their finances from their smartphone or other online channels — from payments, loans, insurance, investment products and investment advisory for retail clients, to payroll management, collection and invoicing, and link to business communities for small and medium enterprises as well as corporate accounts.
Santiago said the designs aim to provide useful, easy to navigate and intuitive user experience on aesthetically appealing platforms to maximize user interface, customer loyalty, and revenue generation.
He also said the BPI has committed a significant amount of capital to deliver these seven platforms to address the changing customer needs and behaviors. It has four platforms live today (BPI Online/Mobile — for retail clients , BanKo — for SEMEs and Mass Retail, Bizlink — for Corporate clients, BPI Trade — for retail stock trading) which it continually upgrades.
“As part of the bank’s open banking framework, BPI has built strong partnerships with shopping apps, aggregators, and electronic money institutions,” he added, as the intention is to create more value for its clients.
The bank is present in Shopee, Grab, Lazada, Zalora and ShareTreats, Paymaya, among others, including brands and services under its aggregator partners such as DragonPay, Paynamics, iPay88, Xendit. “BPI will continue to grow and nurture these partnerships.
There are a number of benefits resulting from competition such as entering new markets and creating new products,” he said.
The mobile wallet app GCash is one of its major partners as another distribution platform for BPI products. The bank continuously collaborates with the platform in providing various financial products and services. These are the currently available cash in/cash out function; two mutual funds and an auto insurance product launched last December 2021; and clients can look forward to BPI deposit and loan products on GCash this year.
“For BPI, this is one way to reinvent banking by being part of its clients’ lifestyle. With this, it creates more engagement with them,” Santiago noted.
He cited other points on digitalization of banking in the country: a young population and digital-savvy population; an increasing number of financial technologies (fintechs) operating in the country which has accelerated in recent years; and the changing regulatory landscape such as Bangko Sentral ng Pilipinas Circular 1105, allowing for the establishment of digital banks, with six licenses granted to date to both local and foreign players, and various BSP initiatives aimed to enhance financial inclusion.
A little over half of BPI’s client base (8.4 million customers as of November 2021) is enrolled in its digital platforms today, with almost 70 percent of them being active users (at least one transaction in the last three months).
The pace of digital adoption of its customers over the last five years has been strong with a compound annual growth rate of 13 percent for enrollments and 20 percent for active users. Over the same period, active user penetration has doubled, from 17 percent in 2016 to 38 percent of total client base in September 2021.
Based on its studies, BPI has noted a divergence in transaction behavior for digital and branch channels. There is an increasing shift from transacting in person at a physical location to transacting online, no doubt accelerated by the pandemic. In September 2021, 91 percent of total transactions were done via digital, with only nine percent in-branch.
“Digital propensity is sticky as more and more customers become accustomed to the ease of use of BPI’s digital platforms,” he stressed. In terms of transaction amount, Santiago said the bank sees an encouraging trend that the concentration of transaction value is now shifting from its branch network to its digital platforms, as it continues to introduce new digital functionalities, products, and services.
According to Santiago, digital banking helped the Philippine economy as it has become a lifeline during the pandemic for every day financial transactions to continue, provided an avenue for the underbanked to have access to finances, and expedited financial transaction processing and provided new kinds of security (albeit with some new risks) versus traditional banking instruments.
He noted that the Philippine digital banking is at par with its neighboring countries in Asia on some features, as local banks are able to partner with international banks and fintechs in offering these digital banking services. Some of the top domestic banks have accelerated investing in digitalization in recent years.
There are also local fintechs offering a lifestyle platform to its users, similar to various foreign super apps.
