RIZAL COMMERCIAL Banking Corp. is looking to launch its own online-only bank next year.

RIZAL COMMERCIAL Banking Corp. (RCBC) is looking to join the virtual banking scene in the country by next year.

Angelito “Lito” M. Villanueva, RCBC’s executive vice-president and chief innovation and inclusion officer, told reporters in a media briefing held in Makati on Wednesday that the bank wants to target the mass market in a bid to boost financial inclusion.

Asked whether they have submitted an application to the Bangko Sentral ng Pilipinas (BSP), Mr. Villanueva said: “Not yet. It is something that I think will happen by January.”

Mr. Villanueva noted that the country’s virtual banking landscape has yet to see local players coming in.

“In the Philippines, we haven’t seen any local digital banks so far as having it offered as a separate proposition,” he said.

Currently, the online-only banking players in the country are only Malaysian financial giant CIMB Bank and Dutch lender ING Bank N.V., which both launched their services this year.

The two players have been trying to attract users through promotional interest rates of up to 4% per annum for those who will be depositing until a certain period.

When asked whether RCBC will also be willing to offer premium interest rates to compete in this playing field, Mr. Villanueva said: “Yes, yes.”

He said they are specifically targeting to attract the mass market to go into virtual banking. He noted, however, that good communication is needed for the market to understand the value propositions of online banking.

“Ano ba ’yung 4% sa pera kong isang libo? … Dapat maintindihan nila na sa bawat isang daan mo, makakakuha ka ng apat na piso (What is 4% of P1,000? … They have to understand that for every P100, you get P4). It has to be quantified,” he explained.

“83% of depositors [are] with deposit sizes of less than 50,000. In general, maliit talaga ’yung deposit sizes (deposit sizes are really small). 68% of them would have deposit sizes of less than 4,000 pesos,” Mr. Villanueva said.

With this in mind, the official said banks should look into developing strategies to attract depositors into putting more money into their accounts.

“One of the things that you need to understand is, how do you now increase the deposit size to a much higher level? You have to provide some carrot sticks,” he said.

“For example, ’yung high interest rates and how they could make use of that facility for them to borrow funds from you at a much lower interest rate. So those things are bundled together to make the proposition more attractive to the rest of the public,” he added.

Once its virtual bank plans come into fruition, RCBC is looking to require an average daily balance of around P800-1,000, according to Mr. Villanueva.

RCBC currently has about two million accounts, with 38% of these accounts’ holders accessing bank services through their online app, he added.

The official said he is positive that with electronic know-your-customer initiatives in place, the bank will be able to attract one million new account users next year.

Mr. Villanueva added that RCBC’s Diskartech app, which will feature various financial inclusion tools for small businesses, is set to be rolled out in January.

RCBC registered a 41% surge in its net earnings to P4.5 billion as of end-September, compared to the P3.2 billion logged in the same period in 2018.

The Yuchengco-led bank’s share price closed unchanged at P24.80 each on Wednesday. — Luz Wendy T. Noble

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