BPI boosts cybersecurity/ IT budget
Ayala-owned Bank of the Philippine Islands (BPI) is one of – if not the – most secured banking giants in terms of cybersecurity in the country, said its president and CEO, Cezar P. Consing.
“We’re in a very good position in cybersecurity. Certainly in the local industry we are probably one of the leaders,” said Consing.
He said the bank is alloting six to seven percent of its total revenues every year for IT and cyber security, in fact for this year alone, it has a 15-16 billion budget for its IT systems.
Consing said they have been spending this much on a yearly basis since 2015 to enhance its IT systems. “Cybersecurity is part of our ‘build the bank’ (processes). If you look at our total tech spend over the last three years, its 6-7 percent of our revenues. It’s quite high.”
BPI, he explained, divided its IT sector into two major components into “build the bank” and “run the bank” which is basically BAU or business as usual. Cybersecurity falls under the “build the bank” because it is a fairly new segment.
“As our revenues go up it could be a consistent 6-7 percent (budget for IT/cybersecurity) and that is the ratio that a lot of big Asian banks have,” said Consing.
Despite shifting to a higher level of banking digitalization, Consing said they continue to put up traditional brink and mortar banks for clients to visit. BPI is more aggressive on expanding its BPI Globe BanKo, the country’s first mobile-based savings bank with 100 branches opened every year to 400 by end 2019.
As for regular branches, they plan to put up at least 12 a year. “What we have to do is balance branches with digital and I think we’re one of the few large Southeast Asian countries where as an industry, we’re still growing our branch network. In other countries, they’re actually reducing their branch network and that’s because they’ve gotten to a point where digital takes over. We’re still at the stage where the digital investment is still being made but they are being made by everybody,” said Consing.
Cybersecurity-related issues are considered one of potential risks that are classified as systemic risks. In a Bangko Sentral ng Pilipinas (BSP) report, as financial technology or fintech increases the interconnectedness of financial markets, it said that the market have become more susceptible to cyberattacks. “Any breach to the system causes not only financial losses but also compromised data integrity,” it said.
Such potential risks that involve the financial system and therefore banks, could blow up into a contagion and it could also lead to procyclicality which was explained by the BSP as when financial firms are “prone to procyclical dynamics in terms of flashing larger swings in investor sentiment, triggering greater herding behavior, amplifying swings in asset prices, and impairing network effects.” Excess volatility in the market is also a potential risk related to cybersecurity.