Surigao lender extends ADB-supported cloud banking for microentreprenuers

The Manila-based Asian Development Bank (ADB) will be piloting a cloud-based banking project as a first step toward improving financial inclusion nationwide.

In a statement on Wednesday, the ADB said Cantilan Bank, in partnership with Oradian, will pilot cloud-based core banking technology. The ADB is extending a $150,000- (P7.5-million worth) grant to Cantilan for the project.

Oradian, an SaaS financia-services provider, will provide Cantilan Bank with its flagship core banking platform product, Instafin, which enables microfinance institutions and rural banks to manage and improve their day-to-day operations.

“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,” ADB Technical Advisor for Finance Lotte Schou-Zibell said.

Schou-Zibell added this software will allow Cantilan clients to save, make a payment, get a small business loan, send a remittance or buy insurance.  The ADB said these services have the potential to serve as a pathway for the poor and underserved, as well as skip traditional barriers to financial inclusion. Cantilan Bank President Tanya Hotchkiss said the new software will allow the bank to reduce its major information-technology (IT)  capital expenses because all it needs to operate the system is an Internet connection.

“Cloud technology can upgrade the competitiveness of rural banks and enable them to provide affordable, high-quality financial services. With this in mind, we are excited to support and observe the collaboration of [the] ADB, Cantilan Bank and Oradian,” Central Bank Governor Nestor A. Espenilla Jr. said.

The cloud-based core banking-technology pilot project will be implemented in five stages, including the full migration of Cantilan Bank’s data and information to the cloud infrastructure. It will also allow mobility enhancement of loan officers in the field through mobile applications linked to the core system.

The software will also integrate with third parties and include payments and remittance services; enable clients to have direct digital access of their finances; and measure impact on financial access.

The ADB said the pilot project will make Cantilan Bank the first bank in the Philippines to use cloud-based core banking technology in its operations.

“[This] can set the tone for the future use of the model in other parts of the Philippines and the region in the future,” the ADB added.

The ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members, of which 48 are from the region, including the Philippines.

Cantilan Bank is based in Cantilan, Surigao del Sur, and provides financial services through 42 branches and offices and 24 automated teller machines that are strategically located across  Caraga region, Misamis Oriental, Compostela Valley, Davao provinces and Southern Leyte.

Oradian is an SaaS provider headquartered in Zagreb, Croatia, with specialist teams in the Philippines, Nigeria and South Africa.

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A professional journalist for over a decade, Cai U. Ordinario currently writes macroeconomic and urban development stories for BusinessMirror. She has received awards for excellence in reporting on the macroeconomy and statistics. She was also cited for her contribution to statics reporting by the National Statistical Coordination Board (now the Philippine Statistics Authority). She is a recipient of journalism fellowships including the Jefferson Fellowship from the Honolulu-based East West Center. She is currently completing her Masters degree in Communication at the University of the Philippines. She graduated with a degree of Bachelor of Arts Major in Journalism from the University of Santo Tomas.