Digital-only OF Bank reports deposit accounts growth amid pandemic

MANILA, Philippines – Opening bank accounts through one’s smartphone allowed Overseas Filipino Bank to grow its depositor base, as digital banking looks to gain ground nationwide.

The bank, considered the first government-owned digital bank, said 25,648 new deposit accounts were created from January to July. Through an onboarding system bolstered by artificial intelligence, which did not require consumers to troop to physical offices, consumers were able to open mobile bank accounts in real-time.

By the end of July, the Land Bank of the Philippines subsidiary had 45,535 deposit accounts in existence, from 19,887 in December last year.

Aside from deposits, OF Bank account holders could transfer money, pay bills and even purchase government bonds.

Before existing digitally, state-run LandBank acquired the former thrift bank in 2017 to turn it into a bank for overseas Filipino workers. By July 2020, OFBank was rebranded as a digital-centric enterprise that had no branches, a first for the country’s cash-dependent marketplace.

The OF Bank is set to acquire its stage 2 post-approval requirement of a digital bank under rules set by the Bangko Sentral ng Pilipinas. Earlier this month, the BSP said it would stop receiving digital banking applications by September 1 to monitor the sector's growth.

In its form, OF Bank said it services clients in OFW-destination countries such as Saudi Arabia, United Arab Emirates, Singapore, and Hong Kong.

Hundreds of merchants joined the OFBank ecosystem, which includes 124 utility companies, 277 government agencies and local government units and banks, credit card companies, healthcare providers, and educational institutions.

In the past year, cashless transactions became commonplace as mobility was restricted in urban areas. This sped up the adoption of digital financial transactions around the country, so much so that earnings of local banks got a boost from fee-based transactions.