MANILA, Philippines – The government plans to convert the Overseas Filipino (OF) Bank into the country’s first digital lender by mid-2020 to serve 10 million Filipinos living and working overseas.
“We’re working to transform it into a branchless digital bank, and we are in close coordination with the BSP [Bangko Sentral ng Pilipinas]… Together with the BSP, we are crafting the rules [and regulations on digital banking] because there are no rules yet,” LandBank of the Philippines president and chief executive Cecilia C. Borromeo said last week when asked about updates on the OF Bank established last year.
“Just exactly like those lenders online—there are a lot of them right? Some lend to businesses, some lend to individuals, but they have a salary-deduction scheme. [OF Bank will be] similar to that, but we will not be only lending—we will also be providing other financial services like insurance, like helping them invest their money, etc.,” Finance Secretary Carlos G. Dominguez III, who chairs Landbank, said.
The digital OF Bank will also provide a platform for bills payment, Borromeo said.
For Dominguez, the shift to digital makes sense, given the lender’s potentially massive reach.
“The potential customers of the OF Bank—overseas Filipinos—are more than 10 million already. If you’re going to go to the traditional way of doing banking, of setting up a branch, getting permission from the different countries to set up a branch—it’s going to take you forever. It’s better to spend time on doing it digitally, and that’s easier to reach all your potential customers,” Dominguez explained.
Once established by June of next year, the OF Bank will “leap-frog every other banking institution in this country,” Dominguez said.
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By then, Dominguez said all Filipinos who will work abroad shall be given a bank account when they register with the Overseas Workers Welfare Administration (OWWA) and the Philippine Overseas Employment Agency (POEA).
Borromeo said digitizing OF Bank will not cost much as “the IT platform of Landbank is very robust and it can handle that—we just need to tweak it.”
“The digital bank will be treated like a branch of Landbank, so it will not entail a huge investment,” Borromeo said. /gsg