EastWest gets BSP OK for digital banking

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has approved the application of Gotianun-led East West Banking Corp. to venture into virtual banking, the first local universal banking group to launch its own fully digital bank.

The listed bank joins other virtual banking players including Dutch financial giant ING Bank, Malaysia’s CIMB Bank Philippines and Singapore-based Tonik Digital Bank.

EastWest president and chief executive officer Antonio Moncupa Jr. said the bank is entering the digital banking space via Komo to be launched by wholly owned thrift bank arm EastWest Rural Bank in the third quarter.

“Komo combines the best of two worlds: the convenience of modern digital banking backed by the security of a strong brick-and-mortar bank like EastWest,” Moncupa said.

He said Komo is going to be a game changer, paying an annual interest rate of three percent for its digital savings account with no minimum balance.

“We see a digital future in banking. With Komo, our customers are sure to get the best that digital banking has to offer while being confident that their money is in good hands,” Moncupa said.

The latest digital initiative is part of the listed bank’s transformation program and commitment to keep innovating with changing customer needs and launching solutions that are seamless, secure, and reliable.

Isabelle Yap, who lead the bank’s Komo project, said EastWest would like to help accelerate digital banking adoption in the country.

“We hope that with Komo’s competitive rates, zero to minimal fees, and convenient platforms we can contribute to the effort,” Yap said.

Melchor Plabasan, director of the central bank’s Technology Risk and Innovation Supervision Department, told The STAR the BSP is now finalizing and scheduled to issue the digital banking framework within the year.

“For existing supervised institutions, they are given the prerogative to adopt a digital banking business model, which they intend to do so. They just need to demonstrate that they have the capability to manage attendant risks,” Plabasan said.

Plabasan said institutions with digital-only business models are required to apply either as a universal, commercial, thrift or rural bank using the existing licensing regime.

“This regime is structured to be largely activity-based, thus, entities seeking licenseas are evaluated according to the product or service that they intend to offer,” Plabasan said.