BPI launches new remittance services

The Ayala-controlled Bank of the Philippine Islands (BPI) has introduced new remittance packages in a bid to strengthen efforts to be the top commercial bank in this line of consumer business.

"The remittance industry in the banking sector has grown by a little over 10 percent last year, while BPI has grown by 21 percent," said Raul D. Dimayuga, BPI Direct Savings Bank president said.

BPI Direct Savings Bank is a virtual or click-and-portal bank that will service its client through the telephone and the Internet. It is positioned as the leading segment of BPI directly handling remittances from overseas Filipino workers (OFWs) and migrant Filipinos.

It recently introduced BPInoy Remittance, an online, real-time remittance service that gives free text alert to both remitter and beneficiary that money has been credited to the BPI account, and that it could be withdrawn in any of the over 1,300 BPI Express Teller ATMs.

Dimayuga said they are looking at a 30-percent growth this year. "In fact, we have grown by 30 percent in the first five months this year."

To achieve its full year target, BPI will remain in the market for new alliances or tie-ups for both inward and domestic distribution. It presently manages tie-ups with several foreign banks and money transfer companies.

The alliances resulted in lower transaction fees equivalent to $7 to $8 per transaction, against rates reaching between $15 to $24 in the formal sector.

The banking group is also looking to expand alliances with non-bank institutions that rely heavily on a wide distribution network.

Meanwhile, BPI president Aurelio Montinola III said they remain optimistic their remittance business will grow by double digits.

"We will be happy to grow by 20 percent," Montinola said, adding that they are also looking at expanding its other business lines like credit cards, ATMs, insurance, and consumer lending.

In end 2005, BPI has 17 international branches, over 100 tie-ups with money transfer agents like Western Union and Travelex, and over 300 correspondent bank relations worldwide.

Remittance business for commecial banks is a fee-based income earner but it not a major contributor to the financial institution’s bottom line. But it opens other business opportunities for the bank such as savings deposits, ATMs, trust funds, mutual funds, credit cards, pre-need products, consumer loans such as housing or auto, and bancassurance or life and non-life insurance products of its subsidairies or affiliates.

For BPI, that means business for BPI and BPI Family Savings Bank, or Ayala Life Assurance, Ayala Plans, and BPI Asset Management Group handling trust and mutual funds.