More Filipinos turning to digital banking

A recent report revealed that more Filipinos are turning to digital banking, nearing traditional banks in perceived safety as consumers increasingly use digital financial platforms for credit and other financial needs.

The same report showed that Filipinos are also showing greater willingness to borrow from digital banks, particularly for emergency and personal expenses, signaling growing confidence in digital lenders as an alternative to traditional banks.

Perceived safety of traditional banks stood at 88 percent, compared with 84 percent for digital banks, according to the 2026 Credit Perception Index by TransUnion Philippines. Results were gathered from 1,000 consumers.

Nearly half of the respondents said a fintech product was their first financial product, more than twice the share of those who cited a traditional bank account.

 Fintech adoption remained widespread in 2026, with 93 percent of Filipinos reporting use of at least one fintech product, slightly higher than 91 percent in 2025. E-wallets accounted for the largest share of fintech usage at 81 percent, followed by digital banks at 52 percent and digital payment apps at 49 percent.

 Further, the report found that Filipinos are increasingly shifting their borrowing preferences toward formal financial institutions. Intent to borrow from family and friends fell to its lowest level since 2023, while future borrowing intent rose most for digital banks, followed by traditional banks and credit cards.

Overall, 93 percent of Filipinos use at least one fintech product, with e-wallets remaining the most widely used, followed by digital banks and digital payment apps.

Fintech products also ranked among the most credible, reliable and convenient digital financial services available to consumers.

The report likewise revealed that e-wallets continued to play an important role in Filipinos’ financial journeys in 2026, with nearly half reporting e-wallets as their first financial product which is more than double the share of those who cited a traditional bank account (20 percent) as their entry point. E-wallets also remained among the financial products with the highest level of consumer knowledge (88 percent) and favorability (90 percent).

However, digital banks recorded the strongest gains in consumer perceptions, with knowledge of digital banks increasing by 15 percentage points to 80 percent while favorability rose by 14 percentage points to 79 percent.

Rising consumer awareness has helped fuel the growth of digital banking. Knowledge of digital banks climbed to 80 percent, while favorability also rose to comparable levels, suggesting that consumers are moving beyond awareness and becoming more comfortable using digital banks for more significant financial needs.

When Filipinos borrow through these channels, emergency expenses remain the primary reason, followed by personal and family-related needs.

Still, the growing trust in digital lenders comes with challenges.

Perceived safety of financial services remained high in 2026, with traditional banks (88 percent) and digital banks (84 percent) viewed as the safest options for conducting financial transactions. Traditional money lending services and digital banks recorded the largest gains in perceived safety.

It added that high interest rates and concerns over scams and fraud remained the leading deterrents for consumers seeking credit.

The report noted that digital finance has become increasingly mainstream as e-wallets have become a common entry point into the financial system while digital banks have posted notable gains in consumer knowledge and favorability.

Interest in financial and credit products continued to evolve in 2026, with the largest increases observed for digital banks, credit cards and electronic wallets.

Meanwhile, expectations of financial improvement fell to their lowest since 2023, with 64 percent of Filipinos expecting their financial situation to improve over the next three months and 73 percent over the next year. Inflation, rising living costs and energy prices emerged as leading concerns affecting consumers’ financial outlooks.

But despite these concerns, the report revealed that Filipinos continued to take proactive steps to strengthen their financial well-being. Intent to explore new digital products and fintech services, use a greater range of financial products and services, access educational materials and borrow or use credit for purchases all increased in 2026 while saving remained the most common action consumers planned to take.

To sustain the momentum in digital banking, the report called for greater transparency on fees, fairer interest rates and stronger security and fraud protection.

In terms of their share in the assets of the banking system in general however, digital banking still has a long way to go.

While the traditional banking sector’s assets stood at P30.96 trillion as of April, those of the digital banking sector is still low at P195 billion. This, of course, is because digital banking is still in its infancy stage and digital bank account holders do not put as much money in their accounts compared to traditional bank account holders.

However, while the traditional banking sector’s resources went down by 0.6 percent, those of the nascent digital banking sector grew by 3.3 percent compared to last March. More choices, the better for the consumers.

I’ve put some money into a few digital banks, to test the waters so to speak. While digital banks offer relatively higher interest rates, the track record of traditional banks is still important, especially when we are talking about entrusting the fruits of my hard work. I’m sure a lot of people will agree with me on this.

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