Pilot cloud-based bank project in Mindanao gets ADB funding

MANILA, Philippines -  The Asian Development Bank (ADB) is funding a Surigao del Sur community bank’s cloud-based transactions that will further open up access to mainstream financial services.

The Manila-based multilateral development bank is extending a $150,000 (roughly P7.5 million) grant to Cantilan Bank, Inc. (CBI) for a pilot project on cloud-based banking technology that will increase financial inclusion in its service areas through the provision of alternative channels of using financial products.

“Financial technology is revolutionizing finance. Recent innovations in digital and mobile phone technology have made it easier to expand access to financial services to people and small businesses in hard-to-reach areas,” said Lotte Schou-Zibell, ADB technical advisor for finance, in a statement.

“Digital financial services offer new opportunities to save, make a payment, get a small business loan, send a remittance, or buy insurance. These services have the potential to serve as a pathway for the poor and underserved to leap over traditional barriers to financial inclusion,” she added.

CBI has tapped Croatia-based firm Oradian to create its cloud technology infrastructure. Shifting to a cloud-based operation will free up funds otherwise used in expensive IT systems.

“By moving to the cloud, we will be able to mitigate various IT, strategic and operational risks. Oradian’s software-as-a-service (SaaS) model enables us to reduce major IT capital expenses, allowing us to spend less annually for a faster system with superior data security — and we just need an internet connection. This has given Cantilan more capacity to focus on our core business and financial inclusion mission,” said Tanya Hotchkiss, CBI executive vice president.

ADB said the cloud-based core banking pilot project would be implemented in five stages, including the full migration of Cantilan bank’s data and information to the cloud infrastructure; mobility enhancement of loan officers in the field through mobile applications linked to the core system; integration with third parties including payments and remittance services; enabling clients to have direct digital access of their finances; and measuring impact on financial access.

CBI will be the first bank in the country to use this kind of technology in its operations. If it succeeds, it can set the tone for the future use of the model in other parts of the country.

ADB said the use of cloud technology would raise the competitiveness of rural banks and enable them to provide affordable and high quality financial services.

Founded in 1980, CBI is one of the largest community banks in the country with corporate headquarters in Cantilan, Surigao del Sur. It has 42 branches and 24 automated teller machines (ATMS) spread out across the Caraga Region, Misamis Oriental, Compostela Valley, Davao provinces and Southern Leyte.

According to its website, it provides loans for agriculture activities and finances small and medium enterprises on top of traditional bank products like savings products and other loans. It likewise provides micro-insurance products.

Oradian, in turn, provides cloud banking software for marginalized and excluded financial institutions that are ready to scale up operations to serve unbanked and underbanked clients. It has specialist teams in the Philippines, Nigeria and South Africa.