The Bangko Sentral ng Pilipinas will close the window for new digital bank applications by the end of this month to closely monitor their impact on the domestic banking system, Governor Benjamin Diokno said Thursday.
Diokno said in an online briefing the policy-setting Monetary Board limited the number of digital bank players to seven, with five digital licenses already approved and two other applications being processed.
“The closure of the application window will allow the BSP to monitor the performance and impact of digital banks on the banking system and their contribution to the financial inclusion agenda,” Diokno said.
“We need to ensure that the business environment continues to allow healthy competition among banks enabling them to offer innovative and competitive financial products and services to their clients,” he said.
The BSP said digital bank applications that were received until Aug. 31 would be processed on a first-come, first-served basis and would be assessed for completeness and sufficiency of documentation/information and compliance with the licensing criteria on the establishment of digital banks.
Applicants that are able to submit the complete documentation on or before the said closure date would be processed by the BSP. Applications with noted documentary deficiencies or did not meet the BSP’s pre-qualification criteria would be returned and would not be subject to further processing, it said.
The BSP said the organizers would be informed that their applications would be deemed closed. After Aug. 31, the BSP will no longer entertain nor accept new or returned applications.
Data showed that the Monetary Board approved the application of five digital banks, including UNObank, UnionDigital Bank and GoTyme. Overseas Filipino Bank Inc. and Tonik Bank converted their existing licenses into digital banks. The approval corresponds to the first of the three-stage licensing process.
The BSP said it is also processing two other digital bank applications.
“As these tech-savvy, customer-centric players introduce innovations in the banking sector, we are confident that the BSP is on track to achieving its digitalization and financial inclusion goals,” Diokno said.
GOtyme, a partnership between the Gokongwei Group and Singapore-based digital banking group Tyme, earlier announced the approval of its license to operate a digital bank in the Philippines. It said the approval was in line with the BSP’s commitment to achieve its goal to bring 70 percent of Filipino adults into the banked population and have 50 percent of payments done online by 2023.
“GOtyme will leverage the Gokongwei Group’s extensive eco-system that is highly integrated into the daily lives of Filipinos—where they already shop, eat and spend family time,” said Jojo Malolos, president and chief executive of GOtyme.
“This distribution strategy will assist in the democratization of financial services, addressing the needs of all Filipinos regardless of age, income or geography,” said Malolos.
The newest digital banking player will provide secure and easy onboarding through both an app and digital kiosks located throughout the mall and retail footprint of the Gokongwei Group.
“In South Africa, 3 million of our 3.5 million customers joined TymeBank through our digital kiosks deployed in retail environments. We believe the combination of this technology and the Gokongwei Group’s nationwide retail footprint provides GOtyme a clear path to rapid growth,” said Nate Clarke, GOtyme’s co-CEO.
GOtyme is expected to launch the digital bank in the Philippines by the second quarter of 2022.
“GOtyme will bring about better financial inclusion for a greater majority of the Filipinos from day one. We see our model of digital banking, with onboarding and education in retail networks and a well-designed app for transacting, as the best way to provide greater financial empowerment to our customers. What Cebu Pacific has done for travel is what we plan for GOtyme to deliver in financial services,” said Lance Gokongwei, president and chief executive of JG Summit Holdings Inc.
Coen Jonker, executive chairman of Tyme, said the Philippines is Tyme’s first expansion in Asia. “With TymeBank’s over 3.5 million customers since its launch in February 2019 and highest net promoter score among banks in South Africa, Tyme has a strong model and hard-won lessons to bring to the Philippines. We are grateful for the trust shown by BSP in our license application. We look forward to getting to know and serving the people of the Philippines as we launch GOtyme,” he said.