BancNet is serving non stop amidst pandemic
The year 2020, which was heavily defined by the COVID-19 pandemic and its subsequent barriers to business, became the perfect opportunity for BancNet to showcase its true worth as a service institution.
Far from its infancy brand as an ATM switch, BancNet in 2020 strategically advanced to the epicenter of major developments in financial technology. This has empowered the consortium to quickly respond to the needs of a market compelled by enforced quarantines to rapidly and heavily shift to digital transactions.
In the age of the New Normal, BancNet evolved to become a model of agile adaptability and operational resiliency that contributed to a strong financial performance despite challenging conditions.
BancNet welcomed four banks as its newest members for the year. These were: the 1st Valley Bank, a development bank based in Cagayan de Oro City; BOF, Inc., a rural bank based in Floridablanca, Pampanga; Rural Bank of Guinobatan based in Guinobatan, Albay; and the recently established Tonik Digital Bank based in Pasig City, a subsidiary of the Singapore-based financial technology company Tonik.
By year end, BancNet saw a total of 120 members, consisting of banks, cooperatives, EMIs, affiliate switch networks, and independent ATM deployers. Its nationwide network grew to 21,824 ATMs from the previous year’s 21,762 machines and over 442,100 POS terminals from 2019’s 304,485 units, up by 0.28 percent and 45.20 percent, respectively.
BancNet serviced over 77 million active cards, versus over 72 million in 2019 or a 6.85-percent growth.
InstaPay’s Demand-driven Growth
Transactions on InstaPay, the real-time electronic fund transfer service that runs on the platform built and operated by BancNet, increased exponentially, even surpassing the volume of switched ATM cash withdrawals from August to October. A growing number of Filipinos who needed to make cyber transactions in quarantined conditions triggered this accelerated transition to e-payments.
Total volume for InstaPay soared by 578 percent to 218 million transactions from 32 million transactions in 2019 while total value rose to ₱1.1 trillion from ₱244 billion, a 372 percent increase. An expanded network of 52 participating banks and EMIs, from 43 in 2019, as well as waived transaction fees at the height of the lockdown period helped drive this growth. On the other hand, the total volume of switched domestic ATM cash withdrawals slipped slightly by 1 percent to end the year with 333 million transactions from336 million in 2019.
Other Digital Channels
BancNet’s other digital channels also thrived during the year. Debit transactions at pointof-sale (POS) payment terminals rose to a total of 87.3 million, 16 percent more than the 75.5 million transactions in
2019. Their total value increased by 30 percent, to ₱315 billion from ₱242 billion.
BancNet Online, an Internet banking portal for BancNet members without their own Internet banking facility, posted a 13.3 percent growth in volume from 146.9 thousand transactions in 2019 to 342.7 thousand transactions and a 265 percent growth in value from ₱1.01 billion in 2019 to ₱2.52 billion.
Cashless payment of utility, credit card, mobile phone, insurance and other bills increased to 13.1 million transactions from 7.2 million in 2019, a growth of 5.8 million transactions, or 80.26 percent. The bulk of bill payments were transacted on mobile banking apps (61 percent) and Internet banking sites (22 percent).
Where ATMs were not available, POS CashOut terminals provided access to cash, particularly the cash assistance provided by the government to the most adversely affected by the lockdowns in addition to the regular beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps). POS CashOut volume more than doubled, from 2.0 million transactions in 2019 to 4.8 million transactions, with total value likewise more than doubling, from ₱9.5 billion to ₱21.9 billion.
Vocalink Project: the next stage
While ensuring continuous service to its members and their customers during the year, BancNet worked on laying the foundations for the world-class real-time payment superhighway it was building in collaboration with Mastercard International. Robust and highly scalable, this innovative, state-ofthe-art infrastructure using the Vocalink technology will provide instaPay participants improved services, better data capabilities, and stronger security features.
Thanks to this partnership with a leader in global payments, it is expected that the year 2021 will mark the next stage of BancNet’s contribution to the Philippine financial system.
ATM Switch Outsourcing Service
BancNet’s switch outsourcing service also continued to expand its reach and scope despite the challenges of the health crisis.
The most notable new service introduced, on account of its relevance to the needs of the times, was a common mobile banking app that enables the customers of subscribing banks to send funds or pay through InstaPay. This value-added service was conceived and designed to assist financial institutions that had lim ited or no resources to develop and operate their own mobile banking apps. The first to subscribe to this service in 2020 was the Partner Rural Bank based in Cotabato. A savings bank and three other rural banks also signed up for this service.
Another recently added outsourcing service is the enabling of UnionPay card issuing for AllBank, a savings bank based in Mandaluyong City. AllBank was the first to avail of UnionPay card issuing so that its customers can pay the 22 million online merchants affiliated with UnionPay.
Information Security Initiatives
Several information security enhancements were implemented during the year to ensure that the network and its participants were strongly protected. These included additional security for work-from-home jump off, the FireEye endpoint and email security solutions, server security solutions, Compromise Assessment, and web application firewall.
Its strict compliance with global security standards earned for BancNet a PCI-DSS Compliance Certificate. PCI DSS is used by all major card brands, including American Express, Discovery Network, JCB, Mastercard Worldwide, VISA International, and VISA USA. Full compliance with PCI DSS version 3.2 assures BancNet members’ and international partner networks’ cardholders that they are protected from fraud and other malicious activities while transacting on the network.
Caring for our employees during a pandemic
The coronavirus pandemic has elevated the health and overall wellbeing of its employees as topmost in BancNet’s priority list.
As early as 2019, BancNet prepared for the worst possible scenarios that would affect the work and personal lives of its employees by updating and implementing its Business Continuity Plan. Some of the significant actions that were undertaken to avert disruption of BancNet operations included: the implementation and compliance monitoring of health and safety protocols, adoption of work from home or split operations arrangements that enabled teams to separately report to either head office or alternate business resumption sites, and upgrade of communication tools such as a new PABX system capable of forwarding office calls to personal mobile or house phones.
The company provided doorto-door shuttle services during the lockdown for commuting employees who needed to report to the Data Center for the 24/7operation of the BancNet systems.
Various employee engagement programs designed to keep employees connected and sustain camaraderie were also implemented throughout the year. A Viber group was created for on-time information dissemination to keep the employees informed and engaged.
Caring for our Community
The year 2020 is remembered not just for the pandemic but also for the various natural disasters that occurred during the year.
In February, BancNet, through its volunteer-employees, distributed relief goods to evacuated residents of barangays near Taal Volcano when it threatened to erupt. It also donated cash to ABSCBN Sagip Kapamilya Foundation, GMA Kapuso Foundation, and Caritas Manila for people who lost their jobs or other means of livelihood due to the community quarantine and for victims of typhoon Rolly, the most powerful typhoon in 2020, that hit Bicol and Southern Luzon.
BancNet in the New Normal
BancNet continued to push the envelope to streamline processes and improve operational policies and procedures so that it may remain responsive to emerging pandemic situations.
Employees were encouraged to use meeting apps and realized it was faster to call for and conduct virtual meetings. Digital signatures on soft copies of business documents became the norm except where hard copies were required by law or participants. Electronic fund transfers were used to pay office bills and other obligations instead of writing checks.
A silver lining of 2020 was it allowed BancNet to benchmark its resiliency and agility levels. It has escaped obsolescence by modernizing its technology infrastructure and embracing digitalization, and has adopted new smart ways of working. As such, BancNet is well positioned in the post pandemic era to make good its commitment to its stakeholders to remain relevant and reliable.