OF Bank to become first branchless lender

State-owned Overseas Filipino Bank (OF Bank) will become the first branchless digital lender in the country primarily catering to clients based abroad, the Department of Finance (DOF) announced.

Pending approval by the Bangko Sentral ng Pilipinas (BSP), Finance Secretary Carlos G. Dominguez III said that OF Bank will provide lending, investments, insurance, bills payment and other financial services to clients using the Internet.

“The potential customers of the OF Bank are overseas Filipinos, and they are more than 10 million. Now, if you’re going to go to the traditional way of doing banking, like setting up a branch, getting permission from the different countries to set up a branch, it’s going to take you forever,” Dominguez told reporters.

Because of this restriction, the finance chief believes “it is better to spend time on doing it digitally, and that’s easier to reach all your potential customers.”

OF Bank, formerly the Philippine Postal Savings Bank, is the smallest among government financial institutions and thrift banks in the country. Since its rebranding in 2018, the bank’s ownership has been under the Land Bank of the Philippines.

Cecilia C. Borromeo, Land Bank president and chief executive, said they are helping the BSP in crafting its regulations for “beta” banks that operate through digital platforms.

“We’re working to transform it [OF Bank] into a branchless digital bank and we are in close coordination with the BSP… it will be the first domestic digital bank,” Borromeo told reporters in an interview at the DOF headquarters.