A bank official of an Aboitiz-led commercial bank has reiterated the need for continued investments on banks’ digital strategies at a time when cybersecurity threats are on the rise and customer behavior is changing.
Speaking to members of the Cebu Bankers Club on Tuesday, Eugene Acevedo, Unionbank of the Philippines senior executive vice president, discussed the new banking trends, particularly from financial technology (fintech) firms, that are challenging traditional financial institutions.
“The trend in Europe and in the other developed economies is to reduce the number of branches. The convenience of mobile and internet channels has made branch visits less popular,” he said.
In the Philippines, banks continue to increase in number.
Data from the Bangko Sentral ng Pilipinas (BSP) show that as of December 2016, there were a total of 28,392 branches of financial institutions in the country.
However, 25 percent of bank clients–and growing–now use mobile banking technologies to transact with their banks.
“Customers now spend hours researching on bank products on the internet before actually visiting the bank to execute the deal,” said Acevedo.
Seeing this trend, he said Unionbank has earmarked P3 billion for its digital transformation, which includes investments in information technology and cybersecurity.
“Over the next five years, more customers will be comfortable with executing simple transactions online. Currently, Filipinos are getting accustomed to transferring small amounts via mobile channels,” he added.
The official pressed on banks to implement a digital strategy, “which will require investments in infrastructure and people.”
At the same time, future bankers will already have to be computer coders, developers and data scientists as the financial industry is leaning toward digitalization.
In his message to the Cebu bankers, BSP Governor Nestor Espenilla Jr. said he considers financial technology as an opportunity, but at the same time, a challenge to the banking sector.
“BSP will continue to pursue reforms to provide an enabling regulatory environment in bringing digital innovations,” said BSP Cebu Director Atty. Leonides Sumbi as she read Espenilla’s message.
According to HSBC Philippines, the fintech market has attracted a gold rush of investment in recent years, particularly from venture capital firms that are eager to back start-ups in the sector.
In the Asia Pacific region alone, investment in fintech players has risen from $103 million in 2010 to $4.3 billion in 2015, according to Accenture. (JOG)