By Beting Laygo Dolor, Contributing Editor
The Bangko Sentral ng Pilipinas (BSP) recently authorized the opening of the country’s first all-digital bank, a subsidiary of the EastWest Banking Corporation.
Known as Komo, the all-digital service is available through EastWest subsidiary EastWest Rural Bank.
At least five other banks offer all-digital service where one can open an account without physically visiting a branch. But EastWest said in a statement last week that it becomes “the first local universal banking group in the Philippines to launch its own fully digital bank, as it adopts its retail banking strategy to the times.”
BSP authorized the digital service last May 8.
The 26-year-old EastWest said its latest digital initiative is part of its program to launch seamless, secure and reliable solutions to its clientele.
The bank said Komo “combines the best of two worlds: the convenience of modern digital banking backed by the security of a strong brick-and-mortar bank.”
In a statement to media, EastWest CEO Antonio Moncupa, Jr., said: “With Komo, our customers are sure to get the best that digital banking has to offer while being confident that their money is in good hands. We would like to help accelerate digital banking adoption in the country.”
With Komo, clients are assured of an annual interest rate of three percent for its digital savings account with no minimum balance required. In contrast, the typical interest rate offered by most banks ranges from 1.5 to two percent per annum, with a minimum balance requirement of anywhere from PHP1,000 (US$20) to PHP5,000 (US$100).
EastWest is the 11th largest bank in the Philippines with assets of over US$6 billion.
In a related development, the country will relaunch later this month the Overseas Filipino Bank (OFBank), also a branchless digital bank catering to the needs of overseas Filipino workers.
According to Finance Sec. Carlos Dominguez III, “Land Bank of the Philippines has made good its commitment to have the country’s first-ever, digital-only, branchless bank up and running by the end of June, this year.”
OFBank and EastWest are thus engaged in a race to claim bragging rights for the tag “first ever” as both are set to formally launch this month.
While established three years ago, Dominguez admitted that “problems with technology” delayed the launch of OFBank.
The OFBank was formerly the Philippine Postal Savings Bank, which was acquired by LandBank in 2017.
The country’s big banks are all moving steadily to greater digital operations as part of a global trend. This became more necessary after the Covid-19 pandemic.
While the government allowed banks to remain open during the lockdown that began in mid-March, all of them opted to open only select branches manned by a skeletal workforce.
The re-opening of the economy this week will not translate to a re-opening of all the branches of the country’s banks, however.
For one, the Bank of the Philippine Islands (BPI) – considered part of the Big three along with Metrobank and Banco de Oro – announced that it was letting go of 30 percent of its employees, or two percent of its total workforce of 21,429 employees as of end-2019.
As part of the “re-balancing” of the BPI workforce, longtime employees have been given the option of applying for early retirement on a purely voluntary basis.
The country’s oldest bank said those who opt for voluntary retirement would receive a hefty separation package with generous terms.
The two other banks in the Big three are likely to emulate the moves taken by BPI: trimming their workforce, moving headlong to digital banking and seeking creative solutions to the challenges of a post-Covid-19 pandemic business environment.