BRICK-AND-MORTAR lenders are refocusing their branch banking strategies this year amid the coronavirus pandemic that has caused their customers to shift to using their digital services.

“We are actively looking for ways to efficiently operate our branch network and to shift the roles of our branches from being transactional to being sales centers of highly complex financial services,” Philippine National Bank President (PNB) and Chief Executive Officer (CEO) Jose Arnulfo A. Veloso said in an e-mail.

At the height of the lockdown last year, only half of the bank’s 716 branches nationwide were operating on a rotation basis at any given time, he said.

To date, nearly all of PNB’s branches are already operating, but safety continues to be a priority for clients as the pandemic continues.

Mr. Velasco said they saw an increase in deposits and digital transactions from customers amid the crisis. This trend will continue in the coming years, he added.

“We will see less over-the-counter transactions. Clients will also expect more complex transactions such as investments, insurance, and loans to be offered online,” Mr. Veloso said.

Meanwhile, Rizal Commercial Banking Corp. (RCBC) closed down 66 branches from their network after “50-60% of branch transactions disappeared” as customers preferred online transactions, RCBC President and CEO Eugene S. Acevedo said in a December briefing.

Mr. Acevedo said they have been downsizing their workforce. The bank has been boosting its digital capabilities and has launched its Diskartech in July last year, an app that offers digital services such as bills payment and a basic deposit account where customers can register through an all-online process.

For its part, BDO Unibank, Inc. said they saw a “steady shift” to digital transactions in Metro Manila and highly urbanized areas, while clients in provinces continued to prefer branch-based banking.

“We will continue to be on the lookout for good sites to open branches and evaluate if a location brings opportunities for us to serve more clients,” the Sy-led bank said in an e-mail.

BDO customers opt for branch visits for transactions like deposits, withdrawals, bills payment, and account opening, the lender said.

This year, BDO said its rural banking unit BDO Network Bank is set for network expansion and branch capacity enhancement to boost lending to small businesses.

“Branch-based transactions are still preferred by clients of our rural bank subsidiary which caters to underserved communities that operate in predominantly cash markets,” BDO said.

‘PHYGITAL’ SHIFT
While banking in a post-pandemic world is unlikely to abandon the digital shift that was simply accelerated by the virus, some clients are still expected to prefer in-person transactions in branches as Filipinos are “one of the most tactile people in the world” who value physical contact, Bank of the Philippine Islands (BPI) President and CEO Cezar P. Consing said during the BusinessWorld Virtual Economic Forum held in November.

In BPI, off-branch transactions including those done through automated teller machines and mobile banking made up 80% of the total from 90% during the lockdown, he said then. These transactions made up 70% of the total prior to the pandemic.

Mr. Consing noted that branch banking made up for bulk of transactions in terms of value despite the rise of the volume of e-payments.

“Come the vaccine, I think it’s (banking transactions) a combination of high tech and high touch… “phygital,” which is physical and digital,” he said.

The central bank wants e-payments to make up 50% of the country’s total transactions both in value and volume by 2023.

In 2018, e-payments made up 10% of the total transactions in terms of volume and 8% in terms of volume, according to a study by the Better Than Cash Alliance. — L.W.T. Noble

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