Thursday, October 09, 2008 Product innovation, technology to make banks more competitive
THE local banking industry is more challenged to “professionally compete and continually innovate to meet the demands of the period” rather than by the looming financial crisis in the United States.
Prudencio Gesta, Rizal Commercial Banking Corp. (RCBC) first vice president and regional sales manager for the Visayas, said that banks should continue improving their services and creating customer-friendly products while putting up technology-driven facilities in order not to be left out by competing financial institutions.
RCBC, for its part, put up its first Electronic Banking Center in Cebu, which is equipped with wireless fidelity (Wi-Fi) Internet Access and automated teller machines. The RCBC Visayas Regional Office at the Cebu Business Park in Cebu City provides bills payment services, as well as phone and online banking services.
Gesta noted that many clients avail themselves of services at the electronic banking center because of its accessibility.
Even if banks make technological advances to maintain and expand their customer base, Gesta urged the public to also check the financial capability of their bank of choice through its quarterly reports.
He assured depositors of a “very strong and stable banking industry” in the light of the ongoing US financial crisis due to the “strict implementation of reforms by a strong regulator, the Bangko Sentral ng Pilipinas (BSP).”
These reforms require, among others, stricter credit handling, increased capitalization and ensuring a capital adequacy ratio that mandates banks to set up enough capital to protect them against risky assets and enable them to absorb the impact of sudden losses.
RCBC has a 20.97-percent capital adequacy ratio as of June 30, which is more than the BSP-required 10 percent and is among the highest in the local banking industry, said Gesta.
RCBC also allocated P980 million for its investments in Philippine bonds that have exposure to the collapsed American investment bank Lehman Brothers. The provisions would come from the bank’s reserves. RCBC has a capital base of P27.4 billion.
“We are lucky that we have a very strong BSP whose efforts to strengthen the banking situation are now more pronounced since the 1997 Asian financial crisis. And those banks that survived that crisis are the very strong banks now, which have extra reserves to cope in cases of substantial losses,” said Gesta.
Some banks, he said, went into mergers as one way of gaining public trust and assuring that money deposited to them are safe.
Gesta, who oversees 39 RCBC branches in Central Visayas, also announced that four more RCBC outlets—one in Banawa and one near the Basilica del Sto. Niño in Cebu City, one in Boracay and another in Iloilo—will open before the year ends.
RCBC also plans to construct two more branches—one at the Asiatown I.T. Park and another along the South Super Highway, all in Cebu City—next year. (NRC)
