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The Philippine central bank approved rules on Thursday allowing the creation and licensing of digital banks as part of efforts to expand financial services as consumers increasingly turn to the virtual realm for banking.
The central bank expects that at least 50% of payments will go digital by 2023, and that 70% of adults will use a digital transaction account by then, giving consumers more choice and away from the usurers.
“We see these banks as additional partners to further promote market efficiency and expand Filipinos’ access to a wide range of financial services,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said in a statement.
Under the framework, digital banks would be a different classification of lender. Digital banks would offer financial products and services that are processed end-to-end through a digital platform and / or electronic channels without physical branches, according to the central bank.
Digital banks should establish a headquarters in the Philippines for administration and support operations, including handling customer concerns, the central bank said.
The central bank’s policymaking department may limit the number of digital banking licenses, depending on the applications it receives.
“The BSP seeks to attract players with a strong value proposition, sufficient financial strength, technical management experience and effective risk management,” said Diokno.
Foreign banks CIMB and ING Bank have launched digital banking platforms in the Philippines.
The central bank’s payment settlement facility processed 5,000 transactions worth 2 trillion pesos ($ 41.6 billion) a day in the first half, triple the daily average from 2004 to 2007, central bank data showed. – Reporting by Neil Jerome Morales Edited by Robert Birsel
$ 1 = 48.0800 Philippine pesos
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