Banks urged to protect market share as Asean integrates

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) urged banks to protect their market share in the country with the advent of the integration among the Association of Southeast Asian Nations (Asean).

BSP Governor Amando Tetangco Jr. told officials and members of the Bank Marketing Association of the Philippines (BMAP) to develop solid and excellent marketing programs since protecting market share in the Philippines would be more challenging under the Asean integration.

Tetangco said banks should focus on strategy, creativity, execution, and results.

 “In general, a product can be upgraded when it is no longer in its prime.  In our industry, however, the ultimate product is public trust. It is a product that is fragile, demands constant care and requires special packaging,” he said. 

He added banks should be able to package specific products to those who need the specific features of the product.

 “This is important in banking where we adhere to a fiduciary responsibility and must constantly meet the bar of client suitability,” Tetangco said.

According to him, banks need to bridge the demands of a differentiated public to the array of products and services that are available.

 “This lasting relationship is the ultimate measure of public trust; it validates the value proposition that your bank presents to the general public,” he said. 

The BSP chief said the banking industry has remained a pillar of strength in the economy in the face of new volatilities in the global financial landscape.

Tetangco said the BSP together with other government agencies launched the National Strategy for Financial Inclusion (NSFI) as well as the results of the National Baseline Survey for Financial Inclusion.

The NSFI provides a platform for government-private partnerships for financial inclusion as a means to achieve inclusive growth.

Results of the National Baseline Survey on Financial Inclusion showed 97 percent of Filipino adults believe  it is important to save money and to have the way or means to save money. 

However, the survey indicated that only four out of 10 Filipinos actually save money. Of those who save, 70 percent keep their money at home while only 30 percent of savers keep their money in banks.

According to the survey, six out of ten adults with bank accounts indicated that the bank’s reputation is their main consideration in opening a deposit account. Other considerations are interest rates, minimum maintaining balance, proximity of the bank branch, and quality of client service.

Likewise, about 45 percent of the Filipinos borrow money and while more than 85 percent of respondents indicate they want to access financial services from formal financial institutions, majority of them still borrow from family, friends and informal lenders.

Banks as source of borrowing stood only at 4.4 percent. The primary considerations in borrowing money are:  interest rates, loan amount, period to pay for the loans, ease of loan application, reputation of the credit institution, amortization, collateral, fees, and processing time.