The Digital Transformation of Banking and Financial Services in the Philippines in the Next 10 Years

By Roger Santos

Last April 6, 2021, I attended a webinar organized by The Wallace Business Forum (WBF) and John Clements Consultants (JC) entitled “The Digital Transformation of Banking and Financial Services in the Philippines in the Next 10 Years.” The webinar was the fifth episode of the WBF-JC Reimagination Series: Building Trust in a Digital Economy.

The keynote speaker was Mr. Hans Sicat — Country Manager of ING Bank, former CEO of the Philippine Stock Exchange, and Second Vice President of the Bankers Association of the Philippines. In his presentation, Hans shared their journey towards becoming a digital bank in the Philippines. He also gave some comments about issues surrounding the regulatory environment in the country.

He started by asking the question, “How will the Philippine banking and financial system look like in a decade?” A clue to the answer, according to him, will be in his presentation.

Hans introduced ING to the group as a company that is active in more than 40 countries. He cited that the Philippines is considered part of their growth market with high growth potential. Globally, they are servicing 39 million retail customers, generating around 60 billion Euros for loans and deposits combined. Additionally, they rank first in the digital retail banking sector in more than half of the countries they are in.

ING is currently utilizing the Think Forward Strategy, which basically means that they are looking at their ecosystem as larger than the banking system. They believe that the banking system is interconnected with other industries and other technology spaces in the world. He then shared ING’s journey from the direct-first to mobile-first banking model. The picture below shows how they started — working directly with the customers — to a mobile bank interface as the primary device that links the customers to the bank.

ING is also the first fintech company to succeed in growing to scale, providing everything from savings, mortgages, investment products, current accounts, and even customer lending.

That growth can still be attributed to their Think Forward Strategy. They assumed that the customer’s expectations are set by the leading digital platforms that are being used every day. Their goal is for customers to choose ING as the preferred app for digital banking — just like YouTube, Facebook or Instagram. Since banking products now have become commodities and they understand that people’s time is precious, ING transitioned to a digital, mobile-first banking model. This allowed them to go where the customers are; in fact, 25% of their customers are active mobile-only clients. This customer experience contributed to their growth last year, with a mobile sales increase nine times more than that of 2016.

In the Philippines, where they’re just in their second year, they already have over 2 million app downloads and over 1 million sign ups. In addition to this, app-only transactions have reached over 3 million. This trust got ING’s mobile app high ratings, placing it at the top of the Net Promoter Score.

As for the regulatory environment, they are keeping close watch on regulators like the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission. They continue to work smartly, making sure that their systems are automated and streamlined to comply with all government regulations.

As Hans ended his presentation, he stated that in 10 years, he believes that the Philippine banking and financial system will continue to have brick-and-mortar operations. However, digital banks/financial firms would have a much higher percentage in terms of transactions and value.

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About the author:

Roger is a family man who loves to cook and play with his son. He spends most of his free time watching movies, especially the ones included in the Marvel Cinematic Universe. Roger loves to sing and, when he’s happy, he sings his heart out, without minding the people around him.