LandBank unit going digital
State-run Land Bank of the Philippines (LandBank) plans the conversion of the Overseas Filipino Bank (OFB) into a digital bank.
This was learned from LandBank President and CEO Cecilia Borromeo who bared the plan at a news conference in Makati City.
“We’re working to transform it into a branchless digital bank and we are in close coordination with the BSP (Bangko Sentral ng Pilipinas) because if things will not change, it will be the first domestic digital bank,” Borromeo told finance reporters.
The cost of the transformation process should not be expensive and allow government to support the transformation financially.
As a beta bank and since the all-digital lender will be the first in the country, both the LandBank and the BSP will craft rules for such an entity.
Finance Secretary Carlos Dominguez III said the establishment of the digital bank will be “exactly like those lenders online” that lend to businesses and individuals under a salary-deduction scheme.
“We will not be only lending (but) we will also be providing other financial services like insurance, like helping the OFW invest their money etc.,” Dominguez said.
“It makes sense to do that because the potential customers of the bank are OFW who number more than 10 million. If we’re going to do the traditional way of doing banking...it’s going to take forever,” he added.
Dominguez expressed the hope that the digitization of OFB will catalyze other banking institutions into doing the same for their thrift units.
Dominguez also said the cost of the transformation process should not be expensive and allow government to support the transformation financially.
“Actually, it won’t be much because the IT platforms of LandBank is very robust and can handle that. We just need to tweak it. The digital bank will be treated like a branch of LandBank so it will not entail a huge investment,” Borromeo explained.
As to the timeline of crafting the necessary rules and regulations, the Cabinet official said it will be done by 2020, which will also be the year the digital bank will begin to operate.
“I think we can have that digital bank up and running by June of 2020,” Dominguez said.
The OFB resulted from LandBank’s acquisition of the moribund Philippine Postal Savings Bank and approved via an Executive Order President Duterte signed on 28 September 2017.