First 6 Digital Banks in the PH Getting Ready to Begin Operations

The first banks that are converting to digital banking in the Philippines are expecting to become operational within the first three months of the year, according to the Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier. “We expect to see new digital bank players operating in the market starting mid-2022,” explained Fonacier.

The BSP is currently finalizing the regulatory framework for digital banks. Nonetheless, “With respect to converted banks, we anticipate the shift in their operations under their digital banking licenses by early 2022,” Fonacier added. For the most part, digital banks are still vulnerable to the same risks that regular banks experience.

“We have yet to release the next phase of regulations to clarify the supervisory expectations on digital banks in relation to capital and liquidity, corporate and risk governance, and risk management.” Hence, these digital banks are “subjected to the same prudential requirements, standards on corporate governance, risk management guidelines, among others, with due regard to the principle of proportionality.”

Only six licenses have been approved by the BSP for digital banks and the central bank has since closed applications until December 2023. “The moratorium on the grant of additional digital bank licenses will allow the BSP to closely monitor the banks’ performance and impact on the banking system including their contribution to enhancing competition and increasing financial inclusion. Nonetheless, the limit on the number of digital bank licenses may be modified or lifted at any point, subject to review and approval of the Monetary Board,” elaborated Fonacier.

Commencing the operations for digital banks, however, are still dependent upon their readiness as well as compliance with the pre-operating requirements. The approved licenses of applicant banks are given a year to complete the necessary requirements and launch operations under the regulations in place.

Digital banks will need to have at least one office in the country to address customer issues and complaints, but they will not be reliant on any physical touchpoints as much as possible. The six digital banks in the country are Overseas Filipino Bank of Land Bank of the Philippines; Tonik Bank and UNObank, both from Singapore; UnionDigital of Union Bank of the Philippines; GOtyme of Robinsons Bank Corp.; and Maya Bank, owned by PayMaya.

Source: Manila Bulletin