Philippines strengthens fintech promotion with two new digital banks

Manila-As Southeast Asia strengthens its foray into FinTech, the Central Bank of the Philippines has granted two more digital banking licenses.

Sequoia India-backed Tonic Digital Bank and Singapore-based UNObank have secured licenses, said Bangko Sentral Bank Governor Benjamin Diokno on Tuesday. They will join the Overseas Philippine Bank with the support of the licensed country in March.

The latest move in the Philippines occurs when the COVID-19 pandemic accelerates the acceptance of digital financial services in the region. Malaysia plans to distribute digital banking licenses next year, but Singapore has already awarded four. Elsewhere in Asia, Hong Kong has eight virtual banking licenses.

The three digital banks in the Philippines are set up to compete with the traditional and well-established lenders of countries planning their own digital push. The prize is a market of about 110 million people, and two-thirds of the population does not have a bank account. In addition, the country recorded a surge in volume and value of digital trading during the coronavirus pandemic.

“Securing a digital banking license is one of the expected milestones this year,” Tonic CEO and founder Greg Krasnov said in a statement. “This will further strengthen our foothold in the neo-banking space by accelerating the rollout of additional lending and payment products.”

Tonik raised $ 44 million in funding based on a previously acquired local banking license and launched the service in March. According to the company, it has secured more than 1 billion pesos (about $ 20 million) in retail deposits in less than a month.

UNObank is operated by Singapore-based Digibank Asia, which is affiliated with digital banking technology provider Mambu and Amazon Web Services.

UNObank still needs to comply with other requirements, Central Bank Vice President Chuchi Fonacier told Nikkei Asia. “Maybe UNO Bank will be able to launch a digital banking service next year,” Fonacie said.

“In the long run, our goal is to close the gap with financial inclusion. Using UNObank, we have unmet financial needs in Southeast Asia and South Asia,” said Manish Bali, co-founder of UNObank. We are building the first full-spectrum digital bank to serve people. “

The Central Bank of the Philippines introduced the “Digital Banking” category last year as part of its efforts to attract more people into the formal financial system. We plan to issue five licenses first.

Digital banking licenses are granted to banks without physical branches and require a capital of at least 1 billion pesos.

Several other companies are looking to license digital banks, including South African FinTech Tyme, which is affiliated with Philippine conglomerate JG Summit Holdings.

In an interview with Nikkei Asia last week, Governor Diokuno hopes to digitize half of the country’s financial transactions and have 70% of Philippine adults have a formal financial account by the time he resigns in 2023. Said.

“But this pandemic was a major impetus for that goal, which will probably be achieved sooner or later by the end of 2022,” he said.

Philippines strengthens fintech promotion with two new digital banks

Source link Philippines strengthens fintech promotion with two new digital banks

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