BSP to prioritize digitization in next 2 years

BANGKO Sentral ng Pilipinas (BSP) said on Tuesday it will also prioritize the digitization of financial products and services in the next two years.

BSP made the pronouncement after discovering that only a few Philippine banks are on schedule with their digitization efforts.

According to the Banking Sector Outlook Survey (BSOS), only 39.3 percent of banks started digitizing, while 27.3 percent are still in the planning stages. In particular, the BSOS study noted that 63.4 percent of universal and commercial banks, and 47.3 percent of rural and cooperative banks are still in the planning stages.

The same survey showed that 5.3 percent of banks have not yet begun their digitalizing process and have no plans of doing so, 22.7 percent are behind schedule, 2.7 percent are ahead of time and 1.3 percent have always been entirely digital.

The BSOS said the challenges that banks have encountered in undertaking digital transformation include insufficient in-house skills, lack of the right technology/ tools and overreliance on legacy technology.

The banks also lacked budget or appropriate data governance and tended to focus on short-term thinking over long-term planning, BSOS added.

On the positive side, the BSP said the Philippine banking system is projected to withstand the legacy risks and challenges of the Covid-19 pandemic within the next two years.

“Even prior to the pandemic, banks have been striving to better serve their clientele by making some of their products and services accessible through digital platforms,” said the BSP in a statement.

“In line with this, majority of UKBs (universal and commercial banks) have already adopted programs on digitalization and implemented initiatives to improve their capabilities in this area,” added BSP.

The BSP has so far approved the operation of six digital banks: GoTyme Bank Corp., Maya Bank Inc., Overseas Filipino Bank Inc., Tonik Digital Bank Inc., UnionDigital Bank Inc. and UNObank Inc.