Opening up new bank branches is now less critical compared to before the pandemic since going digital has proven its effectiveness in bringing in more people to be part of the financial system, bank executive said Tuesday.
Ramon Duarte, Union Bank of the Philippines (Unionbank) Transaction Banking and Platform Development head, said he considers investing heavily on putting up more physical branches as “not the way to go” nowadays since “things are rapidly moving towards digitalization.”
Duarte said banks continue to open up more branches to reach more people but in reality, there are still a lot of people who remain unbanked.
“The opportunity is to reach them through digital…That’s the way you are going to bring in more Filipinos and the small businesses into the formal banking sector,” he said in a virtual briefing.
Banks have been strongly supporting the government’s bid toward digitalization of process and payments.
The Bangko Sentral ng Pilipinas (BSP) earlier reported a significant jump in digital payments transactions after the government placed Luzon, the country’s largest island group and accounts for about 75 percent of the economy’s annual output, under an enhanced community quarantine (ECQ) from mid- March to end-April.
The strictest level of community quarantine was even extended until end-May for the National Capital Region (NCR).
The BSP has two electronic clearing houses under its National Retail Payment System (NRPS) — the InstaPay and PESONet.
Under InstaPay, bank account holders may transfer funds up to PHP50,000 per transaction without limit; while PESONet, a credit payment scheme for business-to-business and people-to-business transactions, allows crediting of salaries to employees’ accounts.
BSP Governor Benjamin Diokno said the value of Instapay transactions as of last August surged by 388.7 percent, while the value of PESONEt transactions jumped by 100.7 percent.
In terms of volume, InstaPay transactions rose by 623.8 percent and PESONet by 129.6 percent.
Monetary authorities aim to increase the share of digital payment transactions to at least 50 percent of the total by 2023.
They said the pandemic is a big boost to this goal because the need to adapt to this system expanded exponentially amid the community quarantine. (PNA)