‘Internet banking trend to continue post-Covid’

FITCH Ratings expects internet banking activities to continue surging in the Philippines, and the rest of Southeast Asia, even after the coronavirus disease 2019 (Covid-19) pandemic subsides.

In a statement on Friday, the credit rating agency reported that many major banks across the region had reported an increase in online banking activities since the onset of the global health crisis.

“For example, Bank Rakyat Indonesia (Persero) Tbk reported [an] around 88 percent year-on-year growth in internet banking activity in [the] first quarter of 2020, and a similar trend occurred in many major banks in the Philippines and Malaysia,” it said.

The credit rater is seeing this trend to persist even after the pandemic subsides, as it believes that customers used to cashbased and over-the-counter transactions would maintain their new habits.

“This, coupled with the greater adoption of open banking architectures in some jurisdictions, would force banks to innovate more quickly or risk falling behind,” it said.

Also on Friday, Union Bank of the Philippines (UnionBank) said it was poised to continue powering the future of banking despite an unprecedented disruption spawned by the crisis.

During UnionBank’s annual stockholders’ meeting, its head said most of the lender’s customers resorted to using digital channels because of the enhanced community quarantine implemented in Luzon to contain the spread of the coronavirus.

“Because of this, we achieved record highs in March in terms of digital-account opening in our UnionBank Online app, as well as corporate enrollment into our platform, The Portal,” said Edwin Bautista, UnionBank president and chief executive officer.

In his report to shareholders, Bautista said the crisis had shown that, with digital capabilities, a bank could be run from home, that businesses would adjust to a cashless environment, and that it was not necessary to go to a branch to meet banking needs.

Meanwhile, the Bangko Sentral ng Pilipinas (BSP) had drawn up a three-year digital payments transformation roadmap outlining its priority policy initiatives, including open banking.

Underscoring that the new economy is digital, BSP Governor Benjamin Diokno has said the post-Covid 19 world demanded putting in place the critical pillars of a digital economy. These include robust digital infrastructure, digital skills, e-government, digital ID, and an enabling legal and regulatory framework.

“All these have given new immediacy to [the] BSP’s long-standing financial inclusion and digital transformation agenda for the financial sector,” he said, adding that the central bank was committed to achieve by the end of his term at least 50 percent of retail payment transactions shifting to digital and 70 percent of adult Filipinos having and using a transaction account.