Philippines steps up fintech promotion with two new digital banks
Manila-As Southeast Asia steps up its foray into FinTech, the Central Bank of the Philippines has granted two more digital banking licenses.
Tonic Digital Bank, backed by Sequoia India, and Singapore-based UNObank, have obtained licenses, Bangko Sentral Bank Governor Benjamin Diokno said on Tuesday. They will join the Overseas Philippine Bank with the support of the approved country in March.
The latest move in the Philippines is when the COVID-19 pandemic accelerates acceptance of digital financial services in the region. Malaysia plans to distribute digital banking licenses next year, but Singapore has already granted four. Elsewhere in Asia, Hong Kong has eight virtual banking licenses.
The three digital banks in the Philippines are designed to compete with traditional and established lenders in countries planning their own digital push. Price is a market of around 110 million people, and two-thirds of the population do not have a bank account. In addition, the country has seen an increase in the volume and value of digital commerce during the coronavirus pandemic.
âObtaining a digital banking license is one of the expected milestones this year,â Tonic CEO and founder Greg Krasnov said in a statement. âThis will further strengthen our presence in the neo-banking space by accelerating the deployment of additional loan and payment products. “
Tonik raised $ 44 million in funding based on a previously acquired local banking license and launched the service in March. According to the company, she secured more than a billion pesos (roughly $ 20 million) in retail deposits in less than a month.
UNObank is operated by Singapore-based Digibank Asia, which is affiliated with digital banking technology provider Mambu and Amazon Web Services.
UNObank has yet to comply with other requirements, Central Bank vice president Chuchi Fonacier told Nikkei Asia. âMaybe UNO Bank will be able to launch a digital banking service next year,â Fonacie said.
âIn the long term, our goal is to close the gap with financial inclusion. By using UNObank, we have unmet financial needs in South East Asia and South Asia, âsaid Manish Bali, co-founder of UNObank. We’re building the world’s first full-spectrum digital bank to serve people. “
The Central Bank of the Philippines introduced the âdigital bankâ category last year as part of its efforts to attract more people into the formal financial system. We plan to issue five licenses first.
Digital banking licenses are granted to banks without physical branches and require a capital of at least 1 billion pesos.
Several other companies are looking to license digital banks, including South African FinTech Tyme, which is affiliated with the Philippine conglomerate JG Summit Holdings.
In an interview with Nikkei Asia last week, Governor Diokuno hopes to digitize half of the country’s financial transactions and ensure that 70% of Filipino adults have a formal financial account when he resigns in 2023. Said.
âBut this pandemic has been a major push for this goal, which will likely be met sooner or later by the end of 2022,â he said.