​THE Bangko Sentral ng Pilipinas (BSP) has issued Certificates of Authority (COA) to Operate to two additional banks, allowing them to proceed with full operations as digital banks. This has resulted in a total of six digital banks allowed to operate in the Philippines.

The most recent recipients were UnionDigital Bank Inc. (UDB) and GoTyme Bank Corp. (GTYME), which obtained their certificates last July 12 and 29, respectively.

In the first quarter of 2022, the BSP authorized Tonik Digital Bank Inc. (TONDB) and Maya Bank Inc. (Maya) to operate as digital banks, while Overseas Filipino Bank Inc., A Digital Bank of Landbank (OFBDB), and UNObank Inc. (UBI) were authorized during the second quarter of 2022.

The BSP issues the COA to Operate to digital banks that have substantially complied with the BSP’s conditions for approval and pre-operating requirements. These include capitalization, risk and governance structure, and information technology systems, among others.

The process for securing a COA to Operate begins with the application to establish a digital bank, to be approved by the Monetary Board (MB). Once approved by the MB, the BSP issues a COA to Register, to be submitted to the Securities and Exchange Commission. After registration and completion of all other requirements, digital banks may then obtain the COA to Operate from the BSP.

OFBDB, TONDB and Maya are now fully operational, while UBI, UDB and GTYME have commenced limited operations targeting select customers.

Operating initially under limited capacity is a conservative approach adopted by digital banks to further ensure that all aspects of their digital operations are ironed out prior to fully launching their services to the public.

UBI, UDB and GTYME are expected to publicly launch within the second half of this year.

Digital banks, unlike brick-and-mortar banks, have no physical branches. Their financial products and services are processed end-to-end through digital platforms or electronic channels.

From January to June 2022, the volume and value of electronic payments and financial services processed through digital banks reached 1.4 million transactions and P8.45 billion, respectively.

The operations of digital banks support the BSP’s Digital Payments Transformation Roadmap, which aims to digitalize half of the total volume of retail payments in the country, and onboard at least 70 percent of Filipino adults into the formal financial system by 2023.​