LOCAL lenders are looking to leverage on technology and trust in order to maintain growth and profitability in the dawn of the regional banking integration.
In a recent survey, the Bangko Sentral ng Pilipinas (BSP) asked the presidents/chief executive officers/country managers of 114 banks in the country with regard to their top three strategies on how to sustain growth and profitability, as more foreign banks are looking to enter the local scene.
“While the regional banking integration slowly unfolds, banks are facing new aspects of competition and may benefit from a good competitive strategy. In the survey, banks are asked how they will maintain growth in an era of intense competition, heightened customer expectation and nontraditional market entrants,” the BSP said.
The Asean’s vision for financial integration seeks to achieve a well-harmonized and smoothly functional financial system by 2025, characterized by more liberalized capital account regimes and interlinked capital markets.
Part of this financial integration vision is the ABIF, or the framework agreed among the Asean member-states to facilitate the entry and operation of Qualified Asean Banks in other Asean countries to promote equal access and treatment among local banks and foreign entrants in each economy.
The local banks’ top three plans to maintain their stronghold amid the integration include developing new capabilities, expanding market reach and leveraging client relationship.
Survey results in particular showed that 71.1 percent of banks have plans to use technology in their banking transactions.
“The results of the survey also show that a majority of the banks use technology to address operation performance, internal risk controls, risk management, business continuity, compliance, customer experience and client-based expansion,” the BSP said.
In expanding market reach and leveraging on client relationships, banks said they are looking to do this by “deepening” the bank-customer connection and by developing new products that would especially cater to the needs of the local market.
“Hiring and retaining of key talents is also essential to maintain banks’ profitability. Similarly, respondents also expect that pursuing organic growth, leveraging on technology and restructuring internal organization are equally important in maintaining profitability,” the BSP said.