Philippines shift to neobanking underway

MANILA, Philippines — The Philippines’ financial market is expected to slowly transition into largely neobanking as Filipinos are now adapting digital transactions.

“What we will see is a radical shift to neo-banking. More startups will be able to bring in fintech advancements, which will benefit the nation as a whole,” said Pera Hub president and chief executive officer (CEO) Ian Ocampo.

 A neobank is a kind of digital bank without any branches. Rather than being physically present at a specific location, neobanking is entirely online.

Neobanks can be called fintech firms that provide digital and mobile-first financial solutions payments and money transfers, money lending, and more.

According to Ocampo, what will boost this further is the collaboration with the government.

In a recently concluded World Fintech Festival, initiated by the Philippines, Ocampo said the digital economy is changing the way people do business and live their everyday lives.

The Philippines’ transition to a truly cashless society is well underway, as leading mobile wallet GCash hit P1 trillion transaction value this year. This was even more than the cumulative gross value it had accomplished from 2017 to 2019.

Martha Sazon, President and CEO of Mynt (GCash), said safety protocols and limited mobility during the pandemic have changed the conventions of financial transactions, paving the way for a frictionless, cashless future.

“We are used at least twice a day, every day. But now, we registered 1000 percent transaction growth in relevant use cases.

“We even hit a P1 trillion transaction value - which goes to show how much we’ve helped Filipinos. This was our vision for 2023, yet this was brought to life this year,” Sazon added.