Depositors still skeptical about e-bank transactions

CEBU, Philippines - Although most banks have already put in place online banking infrastructure, over-the-counter banking transactions remain the common practice nowadays.

Cebu Bankers Association (CBC) former president Prudencio Gesta said the Philippine consumers’ banking culture is still dominantly into physical banking transactions, although there are a growing number of depositors that are now making their bank transactions through online channels.

“Filipino depositors are still into face-to-face banking service, although online banking has proven its edge in convenience,” Gesta said.

Recently, major banks in the country announced their aggressive move on opening more branches in strategic areas across the Philippines, to capture more depositors and establish good positioning when the economy rebounds.

However, according to Gesta, the Philippine banking system in the long run will experience strong online-banking users, as the younger generation is now the dominant users of this facility.

 This time, though most online users are corporate clients, while individual or retail consumers are still learning to embrace the online banking technology.

Gesta said most if not all banks in the Philippines have already put in place sound online banking services. In fact, there is no report yet of an online banking fraud incident in recent years, since this trend was introduced.

 Gesta, who is the deputy head for the Visayas of the Rizal Commercial Banking Corporation (RCBC) said that the battle of the banks now is on outsmarting each other in getting the consumers, through optimum customer service strategies, and introducing hard-to-resist products.

In the last few months, several banks have announced to open more branches in the Visayas, specifically Cebu, despite the very fragile economic landscape, to position themselves and prepare for the expected economic recovery in the next one of two years.

RCBC allocated P40 million capital expenditure this year, in opening branches in Cebu, and other areas in the Visayas.

The largest universal bank in the country, Metrobank also recently opened its 34th branch in Cebu at the Park Mall and three more branches will be opened by the Henry-Sy led bank this year in Cebu province.

Likewise, Security Bank already spent at least P30 million investments for the opening of three bank outlets in Cebu, located in Banilad, North Road, and Tipolo in Mandaue City, making a total of five branches in Metro Cebu. This part of the bank’s P500 million, capital expenditure allocated for 2009.

According to Gesta, although there is a growing interest to take advantage of the convenience of online banking practices, the entire banking industry in the Philippines is still spending on opening physical branches, and Filipino culture still dictates that physical banking transaction will be staying for a number of years. — Ehda M. Dagooc