Bank of the Philippine Islands (BPI) plans to introduce a suite of apps as part of a strategy for the Ayala family-led financial institution to lead in digital banking.
This was disclosed by BPI president and CEO Jose Teodoro “TG” Limcaoco on Monday during a media briefing marking BPI’s 170th anniversary and coincidentally his 100th day in office.
“Being a digital banking leader does not mean that we create one super app for all. It means building the right tools for different groups. We will have a suite of apps that can cater to every one of our customer segments and address every customer need,” explained Limcaoco.
Serving SMEs, facilitating payments
Currently, BPI has three existing apps: BPI Mobile (BPI Express Online), BPI BizLink, and BPI BanKo. The bank plans to launch two more by the end of this year and two more next year.
“Later this year, we will soon be introducing a digital solution that is tailored for our SME clients. It aims not only to provide digital banking services, but will also allow our SME customers to link the non-bank solutions that will help them run their businesses better,” said Limcaoco.
“We will also be introducing a new customer loyalty rewards program that our clients will access through an app that will also provide payment solutions,” he said, adding that the bank also plans to launch two new apps next year to cater to other customer segments.
One top of this, the bank also aims to launch mini apps or solutions to allow people to do business more easily, he added. He pointed out as an example the bank’s e-Gov portal, which allows anyone to make payments to the government, even if not a BPI customer.
The bank’s digital initiatives, he said, provide BPI to transform its branches, which have seen a 30% to 70% decline in transactions with some customers moving to digital.
“We are redesigning, reinventing, renewing our branches to transform them from being places for chores such as withdrawals or deposits to avenues of the more high-value interactions that will satisfy our customers’ more complex financial needs, such as investments, planning, and the like,” said Limcaoco.
Watching out for the competition
Limcaoco also addressed questions on competition posed by mobile only digital banks that offer interest rates of as high as 4% per annum for no-maintaining-balance savings accounts and whether the bank would seek a digital banking license.
“We are watching them,” Limcaoco said. “We can see the flows that are moving from our bank to these digital banks are not that great yet, to be honest. But we need to watch.”
When he looks at these digital banks, he wonders about the business model of these banks.
“A bank cannot just be offering high interest rates for their deposits, because that’s an expense, right? They need to be able to lend these deposits out. And I just don’t see where they’re lending it out to cover these rates,” he pointed out.
He also pointed out that it’s easy to move money into an account, but people have to understand how to get that money out without an ATM network.
“The only way you can take your money out is by transferring it to another bank, where you have to pay fees. I wonder whether people realize that those fees they pay may actually eat up into the interest that they get, right?” he noted.
On whether BPI will seek a digital banking license, he said it was not necessary for to apply for one as BPI and its phone-based savings bank arm BanKo could already do what a licensed digital bank could do.