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Banks to continue digital shift in post-pandemic world

Bank of the Philippine Islands (BPI) President and Chief Executive Officer Cezar P. Consing

BANKS will continue to beef up digital capabilities and rethink branch strategies as consumers are likely to keep engaging in off-the-branch transactions in a post-pandemic world, Bank of the Philippine Islands (BPI) President and Chief Executive Officer Cezar P. Consing said on Wednesday.

Mr. Consing said during the BusinessWorld Virtual Economic Forum that the lockdown caused a massive shift in banking behavior among clients and “there is no going back” to old habits for some who have experienced the convenience of transacting digitally.

“I think the baseline was about 70% of transactions [by volume] were done via ATMs (automated teller machines), online or mobile pre-COVID (coronavirus disease 2019). The moment you had the lockdown start in the middle of March, that percentage grew to over 90%,” Mr. Consing said.

Mr. Consing said they saw about 20,000 to 30,000 clients enrolling in the bank’s online banking facility during the lockdown. To date, he said more than half of BPI’s about eight to nine million clients now have online accounts.

As restriction measures were gradually eased, off-the-branch transactions dropped to about 80%, which is “still very, very high” considering the baseline before the pandemic was at 70%, he said.

He noted that the bulk of transactions in terms of value are still being done in branches. However, the volume of branch and ATM transactions remained lower than pre-COVID levels.

This became the trend as people realized the convenience of transferring money digitally, Mr. Consing said.

“It [branch transactions] may never recover, so it raises the issue of branch network. How do you configure the branch network?” he said.

“I don’t think there’s any real turning back… Come the vaccine, I think it’s a combination of high tech and high touch… “phygital”, which is physical and digital.” Mr. Consing said.

He noted that most Filipinos prefer to make payments in person as they are “one of the most tactile people in the world” and they value physical contact.

“So if you can combine both high tech and high touch, I think that will be the answer for the future, at least for Filipinos,” Mr. Consing said.

The central bank targets to make the country a cash-lite society by 2023, where 50% of payments are done digitally both in terms of value and volume.

A study by the Better Than Cash Alliance found that 10% of total transactions in terms of volume were done digitally in 2018 from a mere 1% in 2013. By value, e-payments made up 20% of the total in 2018 from 8% in 2013.

With online banking transactions growing exponentially, Mr. Consing added that cybersecurity is of utmost importance as threats have also evolved.

He said BPI has had to take down an average of 10 phishing sites every day. These sites usually try to convince clients to give away account details, the official said.

“So the way to battle that really is with customer education. You have to continuously repeat that responsible banks will never ask customers for their information,” he said.

The BPI chief added that there is also a need to review current regulations and laws on cybersecurity as new fraud trends emerge.

“Our cybersecurity laws, when they were first drafted, were targeted at the hardware. They have to adjust now that they [scams] happen to be targeted towards this kind of social engineering,” he said. — LWTN

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