By Lito Villanueva, Executive Vice President and Chief Innovation & Inclusion Officer, RCBC
Wallace Business Forum
Building Trust in the Digital Economy
Episode 5: “The Digital Transformation in Finance and Banking in the Philippines – In the Next 10 Years”
April 6, 2021
Good morning everyone.
We once again find ourselves glued to our screens, not by choice, but forced by circumstance. As this has now become one of our major communication channels to continue connecting with each other and do important business, even from a distance. The pandemic has truly changed the course of our lives.
During the recent Lenten break, I got to reflect about our situation while watching the Netflix docu-movie “The Social Dilemma,” which was primarily about the ill effects of social media and how it dictates a lot of our behavior now.
The most significant question the film posed, which is actually the very same question that spurred the growth of digital technology, and any innovation for that matter, is:
How do we make the world better?
I always find myself asking the same question, all the more because we are in a pandemic. The lockdowns are forcing businesses to shrink, if not totally shutdown, leaving a lot of people jobless.
For banks, this means reinventing ourselves in order to respond to the times.
This is the question that fueled the beginnings and sustained the existence of the banking business itself.
We wanted to make the world better.
Perhaps, more impassioned now due to the COVID-19 pandemic.
A lot of banks, pre-pandemic, have been labeled as traditional, set in their ways, and RCBC wasn’t spared. But what has probably set us apart and helped us thrive in the current environment, is self-awareness and the willingness to adopt to the needs of the times. When the pandemic hit, our first instinct was to ask ourselves how we can make things better for our fellow Filipinos.
We might not be the number one bank in terms of the breadth and depth of our services and assets, but we responded as if we were. When social distancing and other health protocols limited in-person transactions, we revved up our mobile banking and quickly mobilized our pre-positioned ATM Go terminals, to seamlessly tap into our partnerships with small financial institutions and retail stores in order to make banking possible even in remote areas of the country.
But we also recognized the need for contextual banking. That especially with the Philippine’s customer make-up, there is no one size fits all digital banking solution. This thus led to RCBC’s segmentation of its mobile apps. The RCBC mobile app to cater to the banked and digital savvy; and RCBC Diskartech for the mass market, composed mostly of the unbanked and digital newbies. During the pandemic, RCBC mobile app introduced more than 15 digital features including in-app UITF placement, mobile check deposit, and first ever digital concierge, among others. And of course, DiskarTech a first of its kind Taglish super app that covers end to end financial solutions, and soon to be available also in Visayan version. The app that set the trend for other long-time players to follow.
Launching the latter seemed like a pebble hurled over a sea of giants. With comparatively a miniscule marketing budget and a single primary platform touchpoint, it seemed a daunting effort. But what we aimed for, were not the giants, but creating a giant ripple that is game-changing, through grassroots social media marketing. It was the pebble that unleashed the digital dam, so to speak, for at that moment, then on, we realized that the digital acceleration in the industry can be, and currently is, unstoppable. There was just no turning back if we wanted to survive this crisis.
But how about the majority of the population who have just been barred from this chance at survival with most things going digital?
Pre-pandemic, the very nature of our country being an archipelago has already prevented many Filipinos from participating in the financial industry because of lack of access to physical banks. The pandemic highlighted this plight of the unbanked and the underserved, by placing another barrier to financial inclusion.
But is it truly a barrier?
How do we make the world—this world—better?
It was then that it hit us: do we have to choose between financial inclusion and digital acceleration? What if we didn’t have to?
And you know what, we really didn’t have to.
Why can’t we do it, if an India or even some African countries can? The Philippines is a country that prides itself to be the mobile utilizing capital of the world in terms of SMS and posts across all social media platforms, and yet we can’t get people to bank using their phones or gadgets? Therefore, the problem is not driving them to go to digital, but rather to have digital access. Access, not just behavior! In a country where almost all adults have mobile phones, banking at their fingertips is the natural way to go.
At the onset of the pandemic, RCBC was privileged to be the first private universal bank to disburse the financial aid from the government to low-income families who needed to get them fast. We are thankful that the government trusted us to help them disburse more than P12.4 billion in emergency cash subsidy to more than 3.3M families benefiting over 16.6 million individuals in 72 out of 81 provinces. What seemed like a preemptive use of a product yet to be launched eventually became a helpful financial inclusion app– DiskarTech.
In less than eight months it was downloaded by nearly 4 million people with 2.6 million of them as registered users. These users come from all 81 provinces in the Philippines—the widest and fastest coverage from app launch, of a local universal bank in the country today. Hand in hand with the warm customer acceptance are the major accolades we’ve received. These include being named as the country’s best digital bank by the prestigious Asiamoney and Alpha Southeast Asia awards.
You see, financial inclusion doesn’t have to suffer in our pursuit of digital acceleration. Far from it, this proves that both can actually be accomplished at the same time.
What’s interesting to note is that close to 90% of top users of our new app- DiskarTech are from the provinces. Some even from 5th class municipalities in BARMM. It turns out, people are after what makes their world better, especially if the product delivers. That’s what happened with the advent of the worldwide web, smartphones, and social media, and the same holds true for mobile banking. I am glad we saw it differently.
Making this world a better place, relies on synergy and collaboration to make big and good things happen. This is what we call open-banking. As we saw how the pandemic reawakened the Filipino’s entrepreneurial spirit, applying this concept through partnerships with global social media giants, such as Viber (another first I may add), aims to further strengthen the financial awareness and capacity of the growing online marketplace. Our very own Viber Community has so far gained more than 12 thousand members in just 12 days.
Trying to make the world a better place is not a utopian goal but a mindset. The determination to try, and the tenacity to make things happen. We embrace challenges and adopt to the changes of the times. For at the end of the day, being number one or the first, do not guarantee sustainability. It is agility and relevance. No one wants to be a Kodak or a Nokia but a Tesla with a dash of Apple.
Remember, this is the decade of digital hypergrowth. Every Filipino must be enabled, engaged, and empowered!
Thank you and good morning.