RURAL BANKS are joining their larger peers as they go into digitizing their operations to improve efficiency and to ramp up their push for financial inclusion.

Without going into details, Fexco Philippines Chief Executive Officer Cathal Brendan Foley said a rural bank will launch its mobile app by January.

Aside from this, Mr. Foley added that the small countryside financial side institutions are also delving more into introducing cash-out schemes.

“And as I see it for know, we see a huge take up in the cash-out type products because there’s pretty much no ATMs (automated teller machines) [in rural areas],” Mr. Foley told BusinessWorld in an interview on the sidelines of their media briefing held at Makati last Thursday.

Fexco is an Ireland-headquartered financial technology firm which has processed about $15 billion worth of transactions in Asia.

It was established in the Philippines in 2015 and has officially launched its services for partner institutions in 2017.

Among its offerings is the EasyDebit launched in December 2017, which facilitates transactions that include cash-outs with convenience fees that average P30 from touchpoints with small merchants including groceries, sari-sari stores, and pawnshops.

“To date, EasyDebit processed P3.5 billion in terms of cash-out and transaction value and has seen 200% year-on-year growth in transactions,” Mr. Foley said, noting that one of the main things that buoy its growth are cash-outs from conditional cash transfers.

Moreover, Fexco is developing a bank app that can be white-labeled by lenders.

The firm is working with lenders particularly rural banks such as the Rural Bank of Rizal, Cantillan Bank and Al-Amanah Islamic Bank and is also in touch with 1,300 merchants in the country through cash-in and cash-out transactions.

Aside from cash-out schemes, Mr. Foley also sees the potential of business in bills payment, loan applications.

“There’s currently about 11,000 bank branches in the Philippines for 110 million Filipinos. There is never going to be a penetration of brick-and-mortar. I think banks will allow agents to operate on their behalf,” Mr. Foley said.

For 2020, the fintech will launch its Springpoint venture which is a combination of solutions meant for nonbank financial players that would want to delve into cash-ins, bills payments, loans, and accounts opening. — L.W.T. Noble

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