Harnessing open banking for the future of financial inclusion
Financial inclusion is increasing In 2017, 23% of Filipino adults had bank accounts. Fast forward to 2021, it jumped to 53%. The ideal is that people, regardless of their net worth, can benefit from affordable financial services.
Apps have certainly played an important role in making financial transactions more convenient and secure, especially amid the pandemic. What has sparked the flourishing of these applications is open banking. Because open banking allows third-party applications to access and control customer accounts, it can transform the consumer experience of financial services in ways that have never been possible before.
An app for every need
Open Banking is anchored on the Application Program Interface (API), which allows customers of, for example, a bank to securely use their online credentials to make online payments and e-wallet recharges with various merchants and billers. It’s what makes it easy to fund your accounts to pay for food deliveries, shop your way in online marketplaces, and pay your electricity and mobile phone bills from the comfort of your home.
The Bank of the Philippine Islands (BPI) has also harnessed digitization and open banking in a way that makes financial transactions simple, intuitive and empowering.
The results are seen in the numbers. In 2020, at the height of the country’s most onerous lockdowns, digital transactions flowing through BPI’s networks increased. There were 2.6 million downloads of mobile applications, 32.9 million transfer-to-anyone transactions worth 174 billion pesos, 18.4 million interbank funds transfers of a value of nearly 137 billion pesos and 59.1 million transactions through open banking worth 131 billion pesos.
“Thanks to BPI’s early investments in digitalization, stemming from a strategic intuition that digital transactions would one day reach an inflection point, the bank was able to navigate the torrent of transactions,” says Mr. Noel Santiago, Chief Digital Officer of BPI.
Partnerships with third-party apps and merchants, coupled with the capacity and reliability of BPI’s digital channels, have made it much easier for customers to change their behaviors. Four notable services received a high rating: BPI to Cash — enables BPI customers to send money to loved ones anytime and anywhere in the Philippines; BPI QuickPay—for fast, hassle-free payments; BPI eADA—digital enrollment for automatic debit arrangements; and Cash on Delivery – allows customers to digitally pay for goods on delivery.
Open digital transactions
For BPI, its open banking ecosystem, launched only in October 2019, has gained momentum through 2021 due to the continued acceleration of digital financial transactions caused by the coronavirus disease 2019 (COVID-19).
BPI Online users have intuitively built a digital lifestyle around BPI’s “digital ecosystem”. A formidable list of open banking partners enabled customers to enjoy seamless, convenient and secure transactions for e-wallets, popular online shopping and delivery apps, prepaid phone services, prepaid utilities, prepaid transportation , government payments, insurance payments, donations and many more. .
BPI ended 2021 with 83 partners offering 786 brands. In the last 12 months, the total amount processed was 281 billion pesos, which is 115% more than the previous year. Additional revenue reached more than half a billion pesos to 554.8 million pula during the same period. The volume of open banking transactions reached 103.3 million, an increase of 75% over the previous year.
“BPI, due to its timely and strategic focus on digitalization, combined with the speed with which Filipinos have embraced a digital lifestyle, envisions making the job of providing financial services and innovations to the masses easier” , shares Mr. Santiago.
“Soon, seven digital banking platforms for all types of customers, covering various services for individuals, SMEs and businesses, will find their way into our smartphones and computers. Thanks to open banking, BPI continues to welcome new partners at a steady pace,” he adds.
For BPI, there is no turning back. The future of financial inclusion is digital.