MANILA, Philippines — Filipino consumers are more comfortable opening bank accounts on their smartphones than consumers in the US and the United Kingdom, according to global analytics software firm FICO.
The FICO Consumer Digital Banking Survey showed that 26 percent of Filipinos prefer to open a bank account on their phones compared to 18 percent in the US and 25 percent in the UK.
Subhashish Bose, lead for fraud, security and compliance in Asia Pacific at FICO, said around 40 percent of Filipinos have a smartphone and are ranked in the top 10 mobile internet users globally, spending an average of 4.58 hours a day on their phones.
“Filipino consumers are digital natives,” Bose said.
The study showed that digital account opening is rapidly becoming the norm in the Philippines amid the coronavirus disease 2019 or COVID-19 pandemic, with 76 percent of consumers saying they would open some kind of financial account online.
Of those that would open a financial account online, 40 percent considers doing so for an everyday transaction account, 38 percent for a credit card and 33 percent for a personal loan.
“As consumers’ reliance on online services grows in response to COVID-19, we expect further shifts in adoption and indeed an acceleration and acceptance in opening bank accounts digitally. It is important that banks closely examine any points of friction in their application process to ensure consumers are not abandoning a process or switching to a competitor,” Bose said.
The survey found that a large percentage of Filipinos had an expectation that they should be able to complete all aspects of account opening online or on their phone.
Out of the regular identity checks needed to open an account, 67 percent of Filipinos thought they should be able to prove their identity by scanning documents or providing a selfie, 47 percent expected to prove where they live without going offline and 45 percent said they should be able to set up a biometric such as a fingerprint scan at account opening.
If all actions required to complete an account opening cannot be accomplished in-session, only 41 percent of respondents said they would carry out the necessary offline actions as soon as possible, while 33 percent thought they would eventually complete offline actions such as taking a phone call, posting documents, or visiting a branch.
A further 13 percent said they would try a competitor, while five percent said they would give up completely.
Overall findings demonstrated that financial institutions in the Philippines that don’t facilitate a completely digital account opening experience could lose over 40 percent of their new business.
Bose said there is research to show that only six to nine percent of applicants move through the funnel and complete the process.
“Banking executives should review the application completion for authenticated versus non-authenticated applications, as well as how many applicants with saved or abandoned applications return to complete the process,” Bose said.
It was older consumers in the Philippines who are more likely to be leading the digital push with the youngest Filipinos being the laggards.