Personal banking is here to stay — bankers

The emergence of electronic banking in the country – which is viewed as coming rather late in the Philippines will not in any manner replace the need for interpersonal banking, which is provided by over-the-counter personnel as well as bank branches.

As speakers at the opening of the two-day 4th Bank Marketing Association of the Philippines conference held at the New World Renaissance Hotel in Makati took pains in explaining the advantage of electronic banking, they nonetheless surrendered to the idea that interpersonal banking would stay in the country for a long time because that is how Filipinos like to transact business, very personally.

It was also noted that even with the automated teller machines in place, bank clients still do business with their own branches, such as for fund transfers and deposits, perhaps because they find an additional security to personal banking.

It was also observed that some banks retain their branch services (even passbook systems) even when they all have existing ATMs in operation because this is what the customer requires.

It was noted especially in the countryside – and the Philippines being composed of 7,100 islands – customers still prefer to transact business with their own branches because they feel comfortable with the people there.

The opening day BMAP conference was keynoted by Sen. Ramon Magsaysay, who noted that the development of e-banking is rather too slow in the Philippines compared with the fast pace of e-commerce.

Other speakers included Union Bank of the Philippines chairman and chief executive officer Justo A. Ortiz Jr., said his bank deliberately did not pursue the trend of certain big banks in the past years of acquiring and merging with other big banks or buying out smaller banks just to make them big.

He said his company opted to come up with carefully studied strategies – rather than the costly and oftentimes hostile mergers and acquisition – such as availing of Internet banking services to ensure a diversity in clientele, which apparently is comprised of the young ones with ages ranging from 20 to late 40s.

"These are the groups that will influence their parents to try using the Internet for their banking needs and these are the same target clientele for the future generations," he explained adding that his company views its existence and operations for the long term rather than the existing markets.

Caesario de Leon III, senior vice president of BPI Direct Savings Bank, said his bank embarked on its journey from being an almost totally branch centric single channel institution to a customer centric multiple channel organization over 15 years ago.

"We achieved this through : a) implementing programs that created structure and behavioral changes to be more responsive to customer needs and b) investing on new technologies and concepts which provided our customers a wider choice of access anytime, anywhere," De Leon said.

He recalled the BPI, undisputedly the country’s oldest bank, pioneered in the installation of ATMs branded as Express Teller in 1983, followed by the point of sale system (POS) in 1987, which is called the Express Payment Systems or EPS and then in 1991 by the introduction of the integrated voice response system or the Expressphone.

In 1985, he said, BPI partnered with Cirrus in providing worldwide ATM access. In 1997, it established the kiosk banking better known as Express Banking Centers and in 1998 it put up the fully integrated call center or 89-100.

De Leon said the development of the Internet technology provided BPI an additional access channel to service its clientele.

"However, unlike earlier technologies that merely enabled banks to service customers better in a more cost efficient manner, the Internet had far reaching effects that changes the landscaped of the business," De Leon stressed.

In the afternoon forum, Alex Ibasco, head of M-Commerce, a subsidiary of Smart Communications, discussed why some banks view the telecommunications companies (Telcos) with hostility and more as competitors than partners in an electronic marketing age.

These factors are: there is a resistance by some banks to change and keep pace with the times; some banks would rather be idle bystanders – opting to watch how development unfold before making any drastic leap; and some banks have a mindset of how they should operate through the years and this corporate culture will drag them down in the fast pace of technological developments, Ibasco said.

Ibasco gave out the following recommendations: Try out pilot sand the dynamics of how things will change; pro actively map out how the bank will change over time; along the organization’s culture to the new realities; and create new products.