Younger generations to boost PHL mobile banking

THERE is a huge potential for mobile banking in the Philippines as the younger generation are bound to prioritize digital services when choosing a bank.

Sergey Sedov, CEO of Singapore-based fintech holding company Unafinancial, told BUSINESSMIRRO� in an e-mail interview that the youth belonging to the 18 to 30 age bracket have a high level of confidence in using the Internet compared to the older generation. He added this group is always on the go and trying to save time as much as possible.

“It is faster and more comfortable to pay bills, transfer funds and get loans online, especially via a mobile app, because a smartphone is always at hand,” Sedov explained. “It is worth mentioning that 93 percent of Internet users in the Philippines own smartphones whereas 67 percent of the population have a PC or a laptop,” Sedov added.

At the same time, Sedov said the share of the young population using a PC (aged 18 to 30) is about 22 percent. Considering that only 32 percent of the Philippine population had a bank account in 2017,

Sedov pointed out there is a decent potential for demand for digital services. “Moreover, the younger population in the islands which do not have access to banking services, but they can access the Internet, they will primarily focus on services that can be received digitally,” he said.

As as response, Sedov said Philippine banks will be definitely developing and improving their mobilebased services in response to the growing demand for digital banking services especially among young people. Sedov added factors such as the coronavirus pandemic and demand for quicker services coming from digital natives will eventually push more banks to adopt digital transformation.

Meanwhile, Unafinancial revealed that from their recent survey, about half of Filipinos value saving options and security in banking apps.

Moreover, the survey noted that Filipinos are also willing to have more opportunities to save money, and have extended functions in the apps in terms of basic financial transactions.

“It turned out that mobile banking apps are used by two-thirds of the respondents [67.7 percent]. On the one hand, such a high index does not fully correlate with Globalwebindex statistics which cite that only 37 percent of adults use the Internet,” Unafinancial said. However, it should be noted that:

The online survey by Unafinancial was conducted among the Filipinos who are interested in finance (192 respondents);

A significant share of the respondents were residents of metropolitan areas from the central regions Metro Manila (41.4 percent) and Calabarzon (13.6 percent);

The Globalwebindex data provided is from Q3 2019. Given the high penetration rate of financial services in the country, these figures would probably be higher now.

Most of the respondents said that they were or had been quite satisfied with the use of banking applications, with 59.4 percent of the respondents rating them 4 or 5 on a 5-point scale.

In general, the survey data confirmed that the Philippines has a solid base for the penetration of fintech solutions, and is ready to develop them further.