Banks start expensive shift to smartphones

By Jerry Maglunog

To avoid inconvenience because automated teller machines (ATMs) are limited in some areas in the country, an increasing number of executives are turning to their smartphones to do mobile banking.

At the click of a finger, details of bank accounts become available, and simple banking transactions become possible by enrolling in mobile banking.

Anyone with Android or IoS-powered smartphones can avail themselves of this service, which, according to the Bankers’ Association of the Philippines (BAP), will soon rule the banking world.

However, the BAP said only a few banks at the moment can afford to “bring” banking literally to the clients’ fingertips through mobile phones because the cost of migrating to the technology required to offer the service is not cheap.

“You have to start migrating your ATMs, then your firewalls before you can do mobile banking. Basically, it’s not cheap,” a source from the BAP, the association of the country’s 34 universal and commercial banks, said.

The ability to offer mobile-banking is literally a million dollar move, said a source from Banco de Oro Unibank (BDO).

“One ATM alone can cost P130,000 to be able to shift from the old Windows server to the next advanced version,” said Joey Pereche, head of BDO’s anti-ATM fraud and management.

When asked how much would it cost a bank with 2,147 ATMs to shift to the next version and offer mobile banking, the official said in jest: “I can give you a calculator.”

One global bank that has been operating in the Philippines for over a century, Citi, echoed the words of the country’s leading bank in assets.

Heather Cox, Citi’s chief client experience, digital and marketing officer for global consumer banking, said banks’ shift to mobile apps to serve clients has made financial technology (fintech) a $20-billion industry.

She said the world is turning to fintech because the trend of clients going to ATMs just to check his or her balance, either in savings account or credit, will be gone.

“You can do it even while eating popcorn or cooking your child’s lunch for school,” Cox said.

She said long before fintech became a byword, Citi’s brand was synonymous with groundbreaking ideas for financial products and services in the Philippines.

With 113 years of market leadership under its belt, Citi consistently sets the bar for the industry, and not only in the traditional sense of banking but also in digital platforms.

“When I joined Citi, the first thing that came to my mind is I will see a lot of branches. But I was wrong because there’s no need to look at our branches. I really seldom see any of our branches,” Aneth Lim, the bank’s head of the media unit, said.

She said this track record stems from Citi’s global strategy to be the leading digital bank. Across the globe, Citi is at the forefront of key digital innovations in fintech.

Under Cox’s leadership, mobile usage increased 50 percent year-on-year. This is particularly impressive, because digital is Citi’s largest and fastest-growing servicing channel. Bea Tan, who heads Citi’s consumer banking business in the Philippines, said “in the Philippines, 47 percent of our customers are registered users of digital banking.”

Year on year, Citi has seen consistent growth in terms of the number of users of both the Citibank Online and Citibank Mobile Banking platforms.

Citi has over 7 million digital banking registered users in Asia alone. Almost 98 percent of all transactions in the Asia-Pacific take place online, or via non-branch channels. That’s roughly 20 million digital banking transactions a month in Asia—and the trend is expected to double in five years.

The innovative approach of the bank led it to win several international awards. Recent wins include Citi being the first to deliver a banking app for the Apple watch, and creating the award winning Citi Mobile Snapshot (available in the US and the UK), which provides customers with a simplified banking experience using Touch ID to log into their account, regardless of device.

Cox said that technology has become a critical enabler in helping Citi serve clients, and ensuring a best in class experience that will keep them coming back for more. Cox has been leading the bank’s drive for global customer satisfaction and financial technology innovation since 2014.