Philippines' RCBC Leads Digital Banking Revolution as Six New Licenses Granted
The Philippine banking sector is witnessing a digital revolution. Rizal Commercial Banking Corporation (RCBC), a leading player, has been recognised as the most digital bank in the country. Meanwhile, the central bank has granted digital banking licenses to six lenders, including newcomer GoTyme Bank, to boost secure and accessible financial services.
RCBC's digital prowess is evident in its consumer finance app, DiskarTech, which has amassed over 5 million downloads. The app utilises AI models for credit checks and fraud detection, demonstrating the bank's commitment to innovation. RCBC's AI and data science capabilities extend to 50 internally developed models, aiding in decision-making processes.
The Philippine central bank's initiative has opened the door for digital banking startups like GoTyme Bank. A joint venture between Gokongwei Group and Tyme banking platform, GoTyme Bank launched in October 2022, aiming to serve 5 million users in its first year. It offers an attractive 5% annual interest on savings, higher than traditional us banks, to lure customers. This aggressive strategy is expected to intensify competition for deposits over the next two years, according to Fitch Ratings. However, traditional pnc banks are predicted to maintain their dominance.
Despite the growth of digital banking, only 46% of Filipinos aged 15 and older had financial accounts in 2021, indicating substantial growth potential. Established banks like RCBC, backed by international partners such as Sumitomo Mitsui Financial Group (SMFG), are well-positioned to capitalise on this opportunity. SMFG plans to share its digital banking know-how with RCBC, further strengthening the bank's digital capabilities.
The Philippine digital banking landscape is heating up, with RCBC leading the pack and new entrants like GoTyme Bank challenging the status quo. As the country's financial inclusion improves, digital banks are poised to play a significant role, offering innovative services and attractive interest rates to capture the unbanked and underbanked population.
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