Sequoia India-backed Tonik Digital Bank and Singapore-based UNObank have secured licenses in Philippines. The Philippines’ latest move comes as the COVID-19 pandemic accelerates the region’s embrace of digital financial services. Malaysia plans to hand out digital banking licenses next year, while Singapore awarded has already awarded four. Elsewhere in Asia, Hong Kong has granted eight virtual banking licenses. The three digital banks in the Philippines are set to compete with the country’s traditional, well-entrenched lenders, which are plotting their own digital push. The prize is a market of around 110 million people, where two-thirds of the population has no bank account. The country, moreover, has recorded a surge in the volume and value of digital transactions amid the coronavirus pandemic. The Philippines’ latest move comes as the COVID-19 pandemic accelerates the region’s embrace of digital financial services. Malaysia plans to hand out digital banking licenses next year, while Singapore awarded has already awarded four. Elsewhere in Asia, Hong Kong has granted eight virtual banking licenses. The three digital banks in the Philippines are set to compete with the country’s traditional, well-entrenched lenders, which are plotting their own digital push. The prize is a market of around 110 million people, where two-thirds of the population has no bank account. The country, moreover, has recorded a surge in the volume and value of digital transactions amid the coronavirus pandemic.
The Philippine central bank introduced the “digital bank” category last year as part of efforts to bring more people into the formal financial system. It intends to issue five licenses initially. Digital banking licenses are awarded to banks without physical branches, and they must have a capitalization of at least 1 billion pesos. Several other companies are eyeing digital bank licenses, including South African fintech Tyme, which has partnered with Philippine conglomerate JG Summit Holdings, for its Philippine rollout. Half of the country’s financial transactions to be digital and 70% of Filipino adults to have formal financial accounts by the time he steps down in 2023.