DIGITAL banks are expected to support economic recovery this year, through increased financial accessibility among micro, small and medium enterprises (MSMEs), Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Tuesday.
Digital banks, unlike brick and mortar banks, have no physical branches. Their financial products and services are processed end-to-end through a digital platform or electronic channel.
In 2021, the Monetary Board approved six digital bank applications in 2021, namely: UNObank Inc., UnionDigital Bank Inc., GoTyme Bank Corp., Maya Bank Inc., Overseas Filipino (OF) Bank Inc. and Tonik Digital Bank Inc.
“By offering convenient and affordable financial products tailored to the needs of MSMEs, digital banks can accelerate financial inclusion in the country,” Diokno said.
Aside from offering traditional savings and time deposit accounts, digital banks are seen to improve MSMEs’ access to credit through mobile-friendly lending and investment facilities.
Digital records of sales and payment transactions can also be used in assessing the creditworthiness of MSME borrowers.
OF Bank and Tonik Bank, which converted their existing banking licenses to digital banking, have reportedly onboarded 120,000 new deposit accounts as of end-September 2021.
Meanwhile, UNObank, UnionDigital Bank, GoTyme and Maya Bank are expected to begin operations this year.
“The BSP remains committed to fostering a regulatory environment that is supportive of financial innovations, while promoting healthy competition in the financial system,” the governor said.
Under its Digital Payments Transformation Roadmap, the BSP aims to digitalize at least half of financial transactions in the country and onboard at least 70 percent of Filipino adults into the formal financial system by 2023.