Saturday, 20 April 2024

Trust, partnerships, and open banking key to BPI’s growth in the Philippines

5 min read

By Chris Kapfer

Bank of the Philippine Islands is expanding its reach and deepening retail loan market impact by enhancing digital and physical networks, embracing open banking partnerships, and introducing inclusive solutions

  • BPI's total retail customer base reached 11 million, with an addition of 1.5 million in 2023
  • More inclusive products were introduced to take advantage of strong consumer demand
  • Robust branch network is a strategic advantage for broadening customer base

Bank of the Philippine Islands (BPI) is ready to pivot from its well-known affluent banking proposition to embrace inclusive growth, said executive vice president and head of consumer banking, Ginbee Go, who highlighted the bank’s expanded engagement in the core mass market across a broader base of income segments.

The Philippines’ second-largest retail bank has grown its customer base to 11 million with the addition of 1.5 million new customers in 2023, half of which were onboarded online. Its operations are supported by a 709-strong branch network and an additional 158 branches from its recent merger with Robinsons Bank. Its microfinance arm, BanKo, complements this with an extensive network of 348 branches.

Expanding the customer base across ecosystems

BPI now has 4.6 million monthly active users across its platforms. The bank’s engagement with customers has changed significantly in recent years, from focusing solely on existing depositors to identifying users interacting across BPI ecosystems as prospective customers. Since 2021, it has rapidly expanded distribution capabilities with third-party service providers to onboard new customers and make them part of a broader consumer finance ecosystem.

To expand market access, BPI partnered with retailers operating physical stores as well as e-commerce platforms. Four out of its seven core digital engagement platforms currently serve retail customers:  BanKo, VYBE wallet, BPI Trade, and the BPI mobile app that received a major upgrade in 2023. 

In 2021, the bank also began offering #MySaveUp and Ginvest on GCash, the largest payments platform in the Philippines, and opened a virtual store on e-commerce platform Lazada, and claims to be the first financial institution to do so.

Focus on inclusivity and sustainability

The acquisition of Robinsons Bank in January 2024 will create synergies across products and platforms. “We understand the value of interoperability, and our mission is to be as inclusive as possible,” said Go.

She said BPI’s robust digital and physical network is a huge advantage as it grows its customer base in the core mass segment; half of the acquisitions happen in branches. 

These strategic moves come at a time when consumer demand for financial services in the Philippines is growing, despite rising interest rates and inflation. In 2023, total retail loans in the Philippines banking industry grew by 17%, with credit card receivables and personal loans expanding at the quickest rate. According to the International Monetary Fund, the Philippine economy is one of the strongest performers in 2023, with real gross domestic product growth of 5.3% and a projected 5.9% expansion in 2024.

BPI reported that its retail loan portfolio expanded by 23% in 2023, reaching PHP 409.8 billion ($7.4 billion). The growth in personal loans during the year was significant, at 71%, totaling PHP 21.3 billion ($384 million). Credit card loans also saw an increase, rising by 38% to PHP 116.6 billion ($2.1 billion).

Go explained: “Our commitment to sustainability and financial inclusion drove us to develop and offer new products like MyBahay and MyKotse, which lengthen terms and lower monthly amortisations for housing and auto loans, respectively.”

In the affluent market, BPI is shifting its focus from mobile and wallet services with mostly transactional features to more lifestyle and personalised services. With VYBE, BPI’s digital stand-alone wallet launched in 2022, the bank offers easier onboarding for new clients, creating a one-stop lifestyle and rewards platform. In its first major mobile app revamp in six years since 2017, it offers personal financial management tools to track and plan cash flows and spending. To date, more than 6.6 million users have migrated to the new app, with an active rate of about 70%. The new version also fully integrates a wallet function.

In wealth management, the bank is developing remote advisory services and plans to launch an app later this year featuring virtual stores, relationship managers, and loan advisors for digital loans. BPI began developing its hyperpersonalisation capabilities in 2023 through its innovation arm, Growth Labs. 

BPI’s move to intensify efforts into core mass and broader-based income segments, while maintaining a dominant position in the affluent market, demonstrates adaptability and foresight, and also highlights the challenges of catering effectively to all segments. The bank, which claims to own 60% of the affluent customer market, underscores the importance of balancing innovation with traditional banking strengths such as branch-centred customer acquisition.

Keywords: Partnerships, Growth, Retail Loan Market, Digital Networks, Inclusive Products, Digital Engagement, Engagement, Ecosystems, Third-party Service Providers, Retailers, Synergies, Interoperability, Sustainability, Consumer Demand, Hyperpersonalisation, Innovation, Branch-driven Customer Acquisition
Institution: Bank Of The Philippine Islands, Robinsons Bank, International Monetary Fund
Country: Philippines
People: Ginbee Go
Leave your Comments
Recent Comments