MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has given the first digital-only bank in Southeast Asia the green light to join the virtual banking sector in the Philippines to boost financial inclusion in the country.
The central bank’s Monetary Board has approved the entry of Singapore-based Tonik Digital Bank as a virtual lender, joining other virtual banking players including Malaysia’s CIMB Bank and Dutch financial giant ING Bank.
Tonik is a transformative digital bank on a mission to revolutionize the way money works in Southeast Asia. It claims to be the first digital-only bank in the region providing retail financial products including deposits, loans, current accounts, payments, and cards on a highly secure digital banking platform.
Tonik said it is aiming at the $140 billion retail deposit and $100 billion unsecured retail lending opportunities in the Philippines.
“We believe the existing Filipino banking customers and the 70 percent of the Filipinos that remain unbanked deserve a better choice – a digital-only bank that is simple, not intimidating, helps them save, all at the click of a button,” it said.
As the world leader in internet and social media usage, the company believes the Philippines is ripe for becoming a world leader in digital banking too.
“We plan to make it happen,” Tonik added.
Vicente de Villa III, managing director for the financial technology subsector at the BSP, earlier said the regulator is completing the review of the rules on online banking.
“It’s in the open banking space. Right now, we are reviewing our regulations. Maybe too early at this point, but it is something we’re definitely exploring. Cause in this day and age, digital banking and innovations are moving forward,” De Villa said.
Based on the BSP’s 2017 Financial Inclusion Survey (FIS), only 15.8 million adult Filipinos or 22.6 percent of the total population have bank accounts, while 52.8 million or 77.4 percent remain unbanked.
As for an approximate breakdown of the banked Filipino adults, 11.5 percent of them are in the formal banking sector. Around 8.1 percent are in non-government microfinance organizations, 2.9 percent are in cooperatives, and 0.3 percent are in non-stock savings and loan associations.
Only 1.3 percent of adults have electronic money accounts.
Data on financial inclusion released by the World Bank in May last year showed only 34.5 percent of Filipinos 15 years old and above have a formal bank account.
This was 3.2 percentage points higher compared to the 31.3 percent booked in 2014.
The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution showed the share of Filipino adults who used the internet to pay bills or buy products or services online grew by 6.3 percentage points to 9.9 percent in 2017.
On the other hand, Filipinos who made or received digital payments in 2017 increased by 5.6 percentage points to 25.1 percent.