Bank of the Philippine Islands – digital frontrunner

July 8, 2019


Bank of the Philippine Islands (BPI), the oldest bank in the  Philippines, continues its tradition of
notching many “firsts” in the industry.

Over the past 60 years - spanning the Mainframe Era (featuring IBM and supercomputers),  the
Self Service Era (characterized by the ATMs) and Experience Era (during the advent of the
smartphones) -  BPI has been front and center in banking technology.

In today’s  digital age,  the 167-year old bank  intends to do no less.
According to President/CEO Bong Consing,  BPI has over the last three years started  building
its foundational digital infrastructure designed to build capacity  and capability in new cutting
edge ways.

The intended  results are increased security, increased business volume , improved turnaround
time, and enhanced customer experience.

The objective, according to Consing,  “is to make the experience of BPI clients seamless as they
move from physical channels, like our branches, to our digital channels, like BPI Online and BPI

“Our digitalization will allow for an omni-channel experience, with clients being able to start a
transaction in one channel and complete it in another,” Consing added.  

“Digitalization will empower our clients as they will be able to bank with us at any time
wherever they may be, and in a manner that is responsive to their particular requirements.”
Already, the first  phase of digitalization has  supported a 13.8% average annual increase in
transaction volumes over the same period, Consing said.

Further, Consing said digitalization will provide more impetus to the bank’s thrust towards
financial inclusion.

“Digitalization will allow us to become more financially inclusive by significantly increasing our
engagement with segments of the market where the banking system as a whole is woefully
under- represented.

“These are small and medium scale companies (or SMEs) and the lower-middle and lower-
income customer segments.”


Consing cited the case of BPI Direct BanKo, a wholly owned subsidiary, whose clients will
 benefit significantly from digitalization.

BanKo  caters to self-employed micro-entrepreneurs  (SEMEs), such as public market stall
operators, and operators of beauty salons and neighborhood bakeries.

BanKo makes loans to self-employed micro-entrepreneurs such as a stall operator in a public
market, a beauty salon operator, or a neighborhood bakery.

In its short history, BanKo has made over Php 4 billion in loans to almost 60,000 entrepreneurs.
Of course, the implementation of digitalization is not without its problems.

“A useful analogy,” according to BPI Chair Jaime Augusto Zobel de Ayala, (JAZA)  “is one where
you decide to fundamentally rebuild your house while still living inside.

“It can be unpleasant and many of our clients were (recently) inconvenienced in painful, abrupt
and unexpected ways.”

While expressing deep regret for the recent incident, JAZA expressed confidence that “we are
over the painful hump and have completed the most difficult steps of our backroom upgrade.”
That said, let us see how BPI performed last year despite a very challenging environment
characterized by high inflation, weakened peso, and  weak equity market.

BPI showed solid numbers across all metrics:
9.5 per cent increase in assets (exceeding two trillion),  12.7 % growth in loans, strong CASA
ratio at 72 per cent, all-time high loan-to-deposit ratio of 85.4 per cent, revenue growth of 10.6
per cent.

BPI also completed three major capital raising activities last year – P 50 billion stock rights
offering (SRO), additional equity via a US Dollar 600 million international bond and a P25 billion
domestic bond – the largest in Philippine corporate history.

(Disclosure: This writer was an officer of BPI prior to joining government in 1986. He  rejoined
BPI as an independent director in 2016. He also sits in the board of BPI Asset Management and
Trust Corporation, and BPI Direct BanKo. )



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