Attention Aussie app developers. The Philippine banking industry is in need of apps to serve its customers. Maybe even local app developers may like to join in as well.
From BusinessWorld Philippines
May 05, 2014
Local banks looking more at online, apps
LOCAL BANKS are increasingly looking to online and mobile banking for fresh revenue streams amid thinning trading gains and stiff competition in core businesses.
Bank of the Philippine Islands (BPI) boasts of having about half a million of its seven million customers using its mobile app and another two million signed up for online banking, according to Executive Vice-President Natividad N. Alejo.
Last week, the bank tied up with sister firm Globe Telecom, Inc. to boost that base, offering free internet access to the BPI app until August 31.
“We feel that expanding the usage of apps is the next step,” BPI Vice-President Armando T. Navarrete, Jr. said during last week’s announcement of the deal with Globe.
“We think the potential’s even much greater. The penetration of smartphones has been more than outstanding,” he added.
The bank’s competitors are playing catch-up. Metropolitan Bank & Trust Co.’s (Metrobank), whose mobile banking app has seen “significantly less” downloads according to an executive, said it was seeing less and less customers going to bank branches.
“Last February, we posted two new apps for Metrobank – a mobile app for iPhone and a mobile app for Android,” Metrobank First Vice-Presiden Mark Anthony B. Perez said.
According to Google’s app retail site, BPI’s app has had 100,000-500,000 downloads while Metrobank’s has only had 5,000-10,000 so far. BDO Unibank, Inc. (BDO)’s own app, meanwhile, has also been downloaded 100,000-500,000 times.
In Apple’s Philippine App Store, only two banking apps have made it to the top 200 free apps: BPI’s in 52nd and the BDO app in 124th.
BPI has had a considerable head start. The Ayala-led bank first offered its mobile banking app on September 1, 2011, much earlier than the debut of BDO’s app on July 31, 2013 and Metrobank’s February entry.
Whichever way the race is going, though, there is no denying online and mobile banking are gaining popularity, and fast.
“In terms of growth, [Metrobank’s online banking platform] is getting more than five times what I was getting in enrollment last year … I think I’m now hitting eight times, nine times bigger in terms of enrollment,” Mr. Perez said.
BPI also said that face-to-face branch-based transactions are on a general decline.
“The [majority] of transactions have actually gone to our alternative channels … When we say alternative channels, that’s everything that’s not the branch,” Mr. Navarrete said.
Monetizing these services, however, appears to be the tricky part.
“We actually don’t make money off the channel,” Mr. Navarrete said. “The way we help is by making the services available in alternative channels. We have not really fixed a figure to that.”
Asked whether BPI would open up its mobile platform to advertising, Mr. Navarrete said this was a possibility.
“Not at this time … Eventually we’ll look at it — I promise we’ll look at it.”
Metrobank First Vice-President Jette C. Gamboa framed Metrobank’s efforts in the context of decreasing margins in traditional businesses.
“There’s so much competition on the lending side of the business. I think in the Philippines, in total, the net interest income is more than half of any bank’s revenue base,” Ms. Gamboa explained.
“If that is now subject to a lot of competition, then naturally, you have to look at other revenue streams, which is your fee-based income.”
“The idea,” Mr. Perez said, “is that customers would be willing to pay if there is value to your offer.”
“That’s why, for retail, we’re also talking about customer experience. You cannot go in and start moving towards these particular products and services, and not pay attention to the fact that fees come from customers.” — R. L. B. Aquino
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