THE Chamber of Thrift Banks (CTB) said its members will seek to reach more unbanked Filipinos through new technology, in compliance with a Bangko Sentral ng Pilipinas (BSP) mandate to increase inclusivess.
During its annual annual convention in Makati City on Friday, new CTB President Cecilio D. San Pedro said the thrift banking sector is well-positioned to reach out to unbanked persons.
“Thrift banks’ role within the communities that we serve puts us at a fundamental position that can contribute significantly to broadening access to financial services,” Mr. San Pedro said in a speech yesterday.
“We shall align our direction with the government’s agenda to decentralize economic activity and increase infrastructure development which is is targeted to boost economic growth through financial inclusion and digitalization.”
On the sidelines of the event, Mr. San Pedro told reporters: “We want to make sure that we serve those clients that are not tapped by the big banks. With that in mind, we fully support the central bank’s move to make sure that we reach out to the unbanked.”
According to the BSP’s latest Financial Inclusion Survey conducted in 2017, only 22.6%, or some 15.8 million Filipino adults, maintain a formal bank accounts. The unbanked cited lack of money and lack of need to have an account as the main reasons.
To address this, the central bank developed the National Retail Payment System (NRPS) framework with the objective of promoting a “cash-lite” economy where financial transactions will move away from cash and checks toward electronic fund transfers (EFT) and digital wallets.
The BSP targets to raise the share of digital payments to 20% of the total transactions by 2020 from 1% in 2013.
Mr. San Pedro said more savings lenders are tapping the Philippine EFT System and Operations Network (PESONet) as well as InstaPay, two automated clearing houses (ACH) under the NRPS framework.
“Marami na (there are many) but it’s all dependent on timing, capital requirement and how member banks are going to approach it,” he added.
PESONet collates transfer instructions and are processed in batches and are made available by the end of the banking day. Meanwhile, InstaPay is another ACH which processes real-time transfers worth P50,000 or lower, with the money credited to receivers after a few seconds.
The central bank targets to shift cash-heavy transactions to digital avenues — which, in turn, should help broaden access to financial services and spur increased economic activity.
Mr. San Pedro added that “most” of the thrift banks are gearing towards harnessing financial technologies (fintech), with some lenders already implementing them.
“With all these fintech companies around, all the new technologies that’s being introduced, we are all prepared for that,” said Mr. San Pedro, who is also the president of Sterling Bank of Asia.
According to central bank data, the thrift banking industry’s assets stood at P1.245 trillion in 2018, up 6.6%. Gross loans were at P916.02 billion, up 6.73%. — Karl Angelo N. Vidal