DIGITAL-ONLY neobank Tonik Digital Bank Inc. (Philippines) will focus on providing high-interest rate savings accounts to retail Filipino clients, officials said on Thursday.

Tonik founder and CEO Greg Krasnov said in a press conference that the company is launching its banking services in the Philippines this year as it looks to tap the country’s huge unbanked population.

“There is a very large market and most of the existing clients of the existing banks are deeply unsatisfied with the banks they are offering in experience and convenience. The interest rates that the banks are offering are very unattractive and that’s unfair. We are looking forward to seeing how many Filipinos will respond to our offer but so far, our test results have been extremely promising,” Mr. Krasnov said.

Eduardo Ramon G. Joson, Tonik Philippines’ chief product officer, said the bank will offer an interest rate of 4-4.5% per annum for regular savings accounts and a higher rate of six percent for time deposits.

Tonik Philippines officially launched on Thursday and claims to be the first neobank to enter the Philippines. The bank was founded in 2018 and obtained its banking license from the central bank in January 2020.

Mr. Krasnov noted that a neobank is a branchless bank made to be a digital-only bank from the very start.

Tonik currently has hubs in many countries including Singapore and Ukraine and one headquarters in the Philippines.

“We understand that Tonik bank will focus on retail clients, particularly on the unbanked and underserved, as well as the emerging affluent millennials in offering services and products through digital technology. We are confident that the bank will be able to find convergence between its organizational objectives and the Bangko Sentral ng Pilipinas’ (BSP) aspirations in advancing financial inclusion through digital,” BSP Deputy Governor Chuchi G. Fonacier said in her virtual message during the bank’s launch.

Since it does not have branches, Tonik said clients can do cash-in and cash-out transactions through point of sale terminals in convenience stores and pawnshops across 30,000 areas nationwide.

Mr. Krasnov said the bank will focus on high-yield savings for retail customers in the meantime, while its debit card feature to be launched in the coming weeks can be used for payments and deposit withdrawals.

The bank’s deposits will be insured with the Philippine Deposit Insurance Corp., said Tonik Philippines President Maria Lourdes Jocelyn S. Pineda.

“We’re in a process of upgrading our license and preparing for a digital one based on the BSP’s definition of a digital bank license. Once we have that full license as a digital bank, then we will definitely be taking on the potential for dollar deposits,” Ms. Pineda added. — B.M. Laforga