Financial inclusion has long been a goal of the Bank of the Philippine Islands (BPI). But only recently has the Bank imbued this pursuit with a conspicuously digital twist.

BPI President and CEO Cezar P. Consing said BPI’s digital transformation efforts are founded on the idea of serving as many Filipinos as possible, including the underserved and unbanked Filipinos across the nation.

He said it is not only about ramping up investments in technology over the next few years, but, more significantly, increasing access to a wide range of financial products and services for every Filipino.

“Digitalization will make financial inclusion truly sustainable. Because digitalization reduces the cost to serve, it will allow us to bank a much greater proportion of the population, including those who may not have the means to leave a lot of money in their deposit accounts,” Consing added.

In this narrative of digital financial inclusion, BPI is increasing its focus on the lower-middle and lower-income consumer segments, which are growing at a very fast rate. These segments require affordable and accessible banking services. BPI uses its microfinance arm, BPI Direct BanKo, Inc. (BanKo), to serve them.

BanKo promotes financial inclusion primarily by serving self-employed micro-entrepreneurs (SEMEs). The Bank provides SEMEs with affordable and appropriate products and empowers its clients with financial advice and solutions that promote the growth and expansion of their enterprises.

Launched in 2017, BanKo makes loans to SEMEs, such as a stall operator in a public market, a beauty salon operator, and a neighborhood bakery. In its two years of operations, BanKo has already made over Php 4 billion in loans to almost 60,000 micro-entrepreneurs.

“BanKo has already made a significant impact on the lives of thousands of Filipino micro-entrepreneurs who previously had limited financing options. And BanKo was specifically created for that, for a greater purpose—to contribute to the nation’s prosperity by reaching out to a wider sector of the population,” said Mr. Consing.

BanKo will have 300 branches by end-2019. At the same time, BanKo will be the first digitalized bank in the country truly focused on financial inclusion, with a robust, secure, agile, and scalable cloud-enabled system that supports basic loans, deposits and mobile wallets, and which provides access to digital channels and payments. In addition, BanKo clients can access their accounts through 1,700 partner agencies.

“BanKo is being fitted with full digital capabilities. It will be a good example of the marriage of branch and digital, and the marriage of digitalization and financial inclusion,” he added.

Increased Engagement

For its clients, the bank’s digital transformation journey has already resulted in the launch of the next generation of the BPI Online and BPI Mobile app. The latest platforms allow for funds to be transferred via the use of a QR code and feature the use of one-time PINs for security. The growth of active users of BPI Online and BPI Mobile makes BPI the bank with possibly the highest digital adoption rate in terms of number of users.

“Digitalization will empower our clients, as they will be able to bank with us at any time wherever they may be, and in a manner that addresses their particular requirements,” said Consing.

But in promoting financial inclusion, the Bank also recognizes the fact that it also needs to include clients who would rather be served in the branches.

Hence, there is a need to balance the Bank’s presence in the digital space and its physical branches. So as the Bank continues to build its digital presence, it is also expanding its physical presence in a strategic way. This means increasing the branch count for BPI and its subsidiaries – BPI Family Savings Bank and BanKo.

“We want to reach more Filipinos. Digitalization will be the key to this initiative, but branch banking will remain essential,” Consing said.

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