Filipinos are breaking the habits of a lifetime when it comes to banking, thanks to coronavirus.
“In the Philippines, a lot of the customer interactions historically were done physically, typically in branches,” says Eduardo ‘Edu’ Olbes, chief financial officer at Security Bank in Manila.
But that stopped very quickly in March, following the first cases of coronavirus in the Philippines and the imposition of a restrictive lockdown. There has been a surge in take-up of digital banking services that should improve financial inclusion and equality in the Philippines in the long run.
The picture varied around the country, but in certain parts of the capital region, three quarters of bank branches were closed, while restrictions on transport, strict social distancing requirements and a night-time curfew meant that people were barely allowed out to visit them anyway.
“While the regulator called out banks as being critical necessities, the reality is the physical infrastructure of the banks was hamstrung,” Olbes says. “Clients really had no choice, and many opted to swing to digital channels.”
To get an idea of how consumer habits changed with the lockdown, consider the two main transaction systems used in the Philippines for electronic fund transfers – Instapay and PesoNet. Instapay is used for digital payments with a relatively small value, settled in real time, while PesoNet is for larger transactions, not in real time but usually completed within a day.
Data provided by the Philippines government shows that use of PesoNet surged 325% in terms of transaction volume between April and May, while InstaPay jumped 57%. And bankers expect the numbers to stick.
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