Manila Bulletin

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.

Network Expansion

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.

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