THE Overseas Filipino Bank (OF Bank) is expected to run as a fully digital bank by mid-2020, with the operational framework now being done with the Bangko Sentral ng Pilipinas (BSP), the Land Bank of the Philippines (LandBank) has reported.
LandBank President and CEO Cecilia C. Borromeo told financial reporters that the bank is working now with the BSP in crafting the rules for making the OF Bank operate as a digital bank.
“I think we can have that digital bank up and running by June of 2020,” Borromeo said.
She explained that the OF Bank will be transformed into a branchless digital bank, which will be a first for the Philippines.
“The BSP calls it a ‘Beta’ bank. Together with BSP we are crafting the rules because there are no rules yet,” she added.
When the OF Bank is transformed into a digital bank, it is envisioned to operate similarly to online lenders, a platform that provides overseas Filipino workers (OFWs) a means to save and invest their money, as well as have insurance.
It will also offer other financial services apart from lending money. “We will provide the OF Bank a platform to pay their bills,” she said.
According to Finance Secretary Carlos G. Dominguez III, the OF Bank is expected to cater to more than 10 million OFWs, which is why the move to change it into a digital bank is advisable as it will be easier to reach OFWs from different parts of the world.
“It just makes sense to do that because the potential customers of the OF Bank—overseas Filipinos alone, it’s more than 10 million already. Now, if you’re going to go to the traditional way of doing banking, of setting up a branch, getting permission from the different countries to set up a branch, it’s going to take you forever. It’s better to spend time on doing it digitally, and that’s easier to reach all your potential customers,” Dominguez said.
Borromeo explained that the current information-technology (IT) system of LandBank will be tweaked to serve as the primary network of the OF Bank when it is being transformed into a digital bank.
“Actually, it won’t be much because the IT platform of LandBank is very robust and it can handle that [shift]. We just need to tweak it and the digital bank will be treated like a branch of LandBank. So it will not entail a huge investment,” she said.
Earlier, it was reported that the OF Bank was supposed to roll out its services in January last year but this was postponed to April as LandBank addresses concerns on the mandate of the newly created bank. The Department of Finance also earlier said it is trying to make the OF Bank a digital one so that it will be easier for OFWs to use their smartphones in all of their transactions.
In September 2017, Duterte signed Executive Order 44, which turned over the control of the Philippine Postal Savings Bank to LandBank so it could be converted into the OF Bank.
“That’s the way we envision operating the OF Bank. We want to leapfrog every other banking institution in this country,” Dominguez added.