BPI Globe eyes 'unbanked sector'

MANILA, Philippines - Newly formed thrift bank, BPI Globe Savings Bank (Bangko) is expecting to generate up to 500,000 clients.

Bangko is a branchless, technology-driven thrift bank jointly owned by the Bank of the Philippine Islands (BPI), Ayala Corp., and Globe.

“Eventually, we want that number to increase to a million,” Aurelio R. Montinola III, BPI president, said.

About 80 percent of the Philippine population or 72 million individuals are classified as unbanked or under banked. Rroughly half of that or 36 million are considered as earning $2 (P100) per day.

Montinola said the low income bracket or those earning P100 a day was the Bangko’s strategic target client.

Montinola assured that the technology-driven thrift bank would not compete with existing proponents of mobile banking, or mainly rural banks and microfinance institutions (MFIs).

Rural banks have individual working relationships with Smart Communications and Globe for mobile banking, with services ranging from bills payments, remittances, loan payments, salary loans and disbursements, and deposit.

Microfinance institutions are dealing with more than three million micro-borrowers against a base of 36 million.

“We want to compliment with them, rather than compete with them. The market is very large,” Montinola said, adding that they are already doing wholesale lending with MFIs through its microfinance arm and BPI Foundation.

Being technology-driven, Bangko will be a branchless bank taking advantage of mobile banking and technology over bricks-and-mortar like traditional thrift banks.

The general concept of branchless banking will rely on mobile phone technology to extend loans and take deposits. It will work on partnerships with MFIs and other institutions that will act as “leaders” or wholesale centers that will deal with the individuals. Most of the concepts will still require Bangko Sentral ng Pilipinas (BSP) review and approvals.

Thus, disbursement of loans or acceptance of deposits and loan payments or other types of basic banking activities will be done by the so-called wholesale centers. It can also be done through Globe or Smart centers accredited by the BSP.

Bigger transactions or volumes will, however, eventually be done through BPI branches as well as branches of its subsidiaries such as BPI Family Savings Bank and BPI Direct Savings Bank.