ING’s recent announcement that it will soon exit the retail banking market in the Philippines has got people talking about other banks they can open an account with, especially digital banks. But what are the available banks in the Philippines that the BSP classifies as a Digital Bank? We list them down below.
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What are digital banks?
According to the Bangko Sentral ng Pilipinas 17, a digital bank offers financial products and services that are processed end-to-end through a digital platform and/or electronic channels with no physical branch/sub-branch or branch-lite unit offering financial products and services.
However, they are required to maintain a principal/head office in the country to serve as the point of contact for stakeholders, BSP regulators, and house offices of management and support, and as a hub to receive and resolve customer complaints.
A digital bank is just one of the bank classifications or categories which include universal banks, commercial banks, thrift banks, rural banks, cooperative banks, and Islamic banks.
The BSP, however, recognizes that there are certain banks that belong to other categories that use the phrase “digital bank” in their marketing channels even if they do not fall under the definition of a digital bank pursuant to circular No. 1105. In a memo, the BSP said that only a bank that is granted the license to operate as a digital bank may represent itself to the public as such in connection with its business name.
“In this respect, a bank should represent itself consistent with its bank classification and the products and/or services that it is authorized to offer,” the BSP said.
The BSP also said that other banks may market themselves as a bank offering “digital banking products or services” or other equivalent terms provided that it has secured the requisite BSP license on electronic payment and financial services for these digital banking products or services.
In summary, there are many banks out there that offer digital banking services but there are only six entities in the Philippines that got their license from the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) to operate as digital banks.
Why only six?
The BSP has limited the country’s digital bank licenses to six in 2021 57 after the other remaining applicants failed to meet the requirements. The BSP said that digital banks have a three-year window to operate after they get the license.
Although we only have 6 BSP-licensed banks in the Philippines, the BSP said that the current cap on licenses is comparable to neighboring countries like Singapore, which has four, and Malaysia, which has five. Keeping at six will allow regulators to closely monitor its developments.
What are the 6 BSP-licensed digital banks in the Philippines?
Overseas Filipino Bank (OF Bank) 21
The Overseas Filipino Bank (OF Bank) of the Land Bank of the Philippines got its license on March 25, 2021. The OFBank offers four digital products and services which include a Digital Onboarding System with Artificial Intelligence (DOBSAI), which allows the real-time opening of a mobile banking deposit account on supported iPhone or Android devices.
Aside from deposit savings accounts, the OFBank’s digital services also include fund transfers, bill payments, multi-purpose loans, and remittances. It also offers physical debit cards.
Tonik Bank 21 got its license on June 3, 2021. Tonik Financial Pte Ltd is based in Singapore and focuses on product development and technology integration for its digital banking platform. Tonik’s banking operations in the Philippines are conducted by its local subsidiary Tonik Digital Bank Inc, regulated by Bangko Sentral ng Pilipinas as a rural bank.
It offers savings with up to 6% per annum, time deposits, Solo and Group Stashes, as well as physical debit cards.
UNO Digital Bank was formerly known as UNObank and got its license on June 3, 2021, as well. According to its website, it will offer a high-interest rate on savings, immediate virtual debit card, no hidden fees, and pre-approved dynamic credit line. It also boasts a fast account setup and uses AI with machine learning for its face recognition onboarding and authentication.
UnionDigital 39 is a subsidiary of UnionBank and got its license on July 15, 2021. The digital bank is yet to launch so details are still limited, as of writing. Its LinkedIn page, though, says that it will enable its customers to “leverage on Fintech, Blockchain, and Open Finance technologies, to move towards one goal of achieving inclusive prosperity.”
GoTyme is a partnership between the Gokongwei Group and the Singapore-headquartered digital banking group Tyme. The Philippines is Tyme’s first expansion into Asia. On August 12, 2021, the BSP has approved GoTyme’s application to operate a digital bank.
The newest digital banking player aims to provide secure and easy onboarding through both an app and digital kiosks located throughout the mall and retail footprint of the Gokongwei group.
According to GoTyme’s Philippines website, users will be able to get an account and card in under 5 minutes and will offer better savings interest, rewards, fund transfers, trading and investing, and 24/7 customer support via call, chat, or e-mail.
Maya Bank is a new digital bank that got its license on September 16, 2021. It was formerly known as PayMaya, but instead of just being an all-in-one money app, it is now a digital bank as well. It offers savings with up to 6% per annum interest, deposits, credits, access to cryptocurrencies, lets you buy load and pay bills, while still giving you access to PayMaya services like deals and promos. Physical debit cards are also being offered.
UPDATE (June 28, 2022): Since many are asking why other digital banking services are not included, that’s because they’re not classified as “digital banks” under the BSP. CIMB is a Commercial Bank, while Komo and SeaBank are Rural Banks.
And there you have it. We hope that this article was able to clarify what a digital bank is and help provide you with options on what digital banks you can try and need to watch out for.
You said 6 banks, how come you named only 5?
KOMO is NOT a Rural Bank. It is a digital banking services offered by EastWest Bank.
Hindi kasama ang cimb ph? Bakit po kaya?
binasa mo ba yung article? Google translate mo kung di mo naintindihan
Nakalagay na doon sa dulo yung explanation.
“UPDATE (June 28, 2022): Since many are asking why other digital banking services are not included, that’s because they’re not classified as “digital banks” under the BSP. CIMB is a Commercial Bank, while Komo and SeaBank are Rural Banks.”
Nagcomment si Tikboy before that particular update.