Banks told to augment digital channels

MANILA, Philippines — Banks and financial institutions were ordered to augment the existing capabilities of their digital channels as the enhanced community quarantine in the National Capital Region and nearby provinces has been extended to prevent the spread of the coronavirus disease 2019 or COVID-19, according to the Bangko Sentral ng Pilipinas.

BSP Deputy Governor Chuchi Fonacier said there is an increasing demand and shift to digital financial service by the general public as the enhanced community quarantine has been extended by two more weeks or until May 15.

Fonacier has directed BSP-supervised financial institutions and operators of payment systems (OPS) to augment existing capabilities and implement appropriate strategies to address customers’ growing requirements for digital channels as a means to fulfill basic financial and payment transactions.

“Potential capacity issues, if not properly managed, may lead to disruptions of critical financial services and elicit customer complaints,” Fonacier said.

On top of insufficient capacity to address the increasing demand for digital channels, Fonacier said other issues that may be encountered during the quarantine period include unavailability of key information technology or operations personnel and critical third party service providers and increasing cyber-attacks, among others.

“Although service degradation may not be avoidable in a crisis scenario, anticipation of these issues, development of the mitigation plan or strategy, and implementation of compensating controls will help minimize impact of the disruption to the customers,” she said.

On a positive note, Fonacier said the increased demand for digital financial services offers a great opportunity for banks to market new and existing financial products and services.

“As such, the BSP urges BSP-supervised financial institutions to ramp up access of existing accountholders to mobile/internet banking and other alternative digital channels,” Fonacier said.

BSP Governor Benjamin Diokno has committed to raise the share of digital payments from total transactions in the country to about 50 percent by the end of his term in the middle of 2023.

Data from the Better Than Cash Alliance (BTCA) showed the share of electronic payments has increase to 20 percent in 2018 from eight percent in 2013 in terms of value and to 10 percent from one percent in terms of volume, particularly with the launch of the National Retail Payment System (NRPS) by the BSP in December 2015.

For one, Bank of the Philippine Islands president and chief executive officer Cesar Consing told the bank’s stockholders during a virtual meeting that online transactions facilitated by BPI jumped by 50 percent last year.

Consing said about 40 percent of BPI’s customers are now enrolled in one of more digital channels and 25 percent of all clients.