RESOURCES
The purpose of this page is to educate and inform readers by providing additional information about financial inclusion and how to develop effective projects.
PHILIPPINE DEVELOPMENT PLAN
2023-2028
Overall, promoting financial inclusion, innovation, and sector health through digitalization will ensure that more people have access to a wider range of financial products and services, leading to greater economic stability and growth. It is important to leverage data and address information gaps, promote safe and efficient payment systems, and foster the development of capital markets and regulatory technology.
(National Economic and Development Authority, 2023)
NATIONAL STRATEGY FOR FINANCIAL INCLUSION 2022-2028
The National Strategy for Financial Inclusion focuses on delivering 4 key outcomes: 1) Reduced disparities in financial inclusion; 2) Improved financial health and resilience; 3) More financially capable and empowered consumers; and 4) Increased access to finance for MSMEs, including startups, and the agriculture sector. Its strategic objectives include: 1) Promote inclusive digital finance; 2) Strengthen financial education and consumer protection; 3) Enhance access to risk protection and social safety nets; and 4) Enhance agriculture and MSME financing ecosystem.
(Bangko Sentral ng Pilipinas, 2022)
MEMORANDUM NO. M-2022-024: RURAL BANK STRENGTHENING PROGRAM
The Rural Bank Strengthening Program (RBSP) was developed by the Interagency Working Group of the RBSP (IAWG-RBSP) for the enhancement of operations, capacity, and competitiveness of Rural Banks (RB). It is composed of four significant elements: (1) Strengthened Capital Base; (2) A holistic menu of five (5) time-bound tracks; (3) Incentives and Capacity-Building Interventions; and (4) Review and Enhancements of Existing Regulations.
(Bangko Sentral ng Pilipinas, 2022)
CLOUD-BASED CORE BANKING IN THE PHILIPPINES:
A RURAL BANK PILOT PROJECT
The key features in the development of CANBNK over the years include system migration to the cloud, launching of tablets for field use, assessment of data security and risks, discontinuation of legacy systems, integration of an API layer, and the commercial launch of end-users’ mobile application. The COVID-19 pandemic did not hinder progress but paved the way for additional third-party integrations and the launch of the fintech matching grant and capacity building program. These developments have positioned CANBNK as a leader in cloud-based banking systems and have opened up opportunities for greater financial inclusion through the use of fintech solutions. It simplified reporting and freed up time for both front and back-end staff and provided customers with a more seamless experience.
(Asian Development Bank, 2021)
CLOUD-BASED CORE BANKING IN THE PHILIPPINES
Asian Development Bank (ADB) and Cantilan Bank, Inc. (CBI) created and signed an agreement for the pilot study on cloud-based core banking technology. In January 2019, CBI pioneered the full reliance on a cloud-based Software as a Service (SaaS) system as their core banking system making them the first BSP-regulated bank in the Philippines to do so. Several factors affected the advancement of implementing the system such as the time and resources in building the business case, buy-in from senior management, and formation of a dedicated team of Instafin Champions. The cloud-based SaaS Instafin consists of four key stages: migration to the cloud, field mobility, third-party integration, and end-user digital access.
(Asian Development Bank, 2019)
A long-term strategic approach to innovation to the Digital Transition to Rural Banks in the Philippines
The transition to a cloud-based system resulted in much better connectivity, a reduction in Information Technology (IT) resources, streamlined reporting, more time for both front and back-end staff, and a more seamless client experience. Consumer satisfaction grew, particularly regarding staff effectiveness and transaction simplicity.
By early 2020, more than 25 other BSP-regulated financial institutions had adopted cloud-based core banking systems. Cantilan Bank, the first bank to adopt such a system, (CANBNK) saw their client base increase from 95,000 to 130,000. Numerous smaller institutions immediately saw their financial results improve and their client base expand.
A completely new way of conducting business was made possible by CANBNK's switch to a cloud-based system. From data management to monitoring and analysis, with implications for decision-making, customer service, and brand strategy. These were crucial for maintaining corporate operations throughout the COVID-19 pandemic, and CANBK's vision for digital transformation offered strategic guidance at that time.
Technical and financial support is crucial for striking a balance between innovation and risk management. This is why digital initiatives are costly, but strategic investments must be made. Rapid improvements are often associated with system changes, but the long-term shift comes from doing "more of the same" but in a different way. Minimizing quasi-activities and costs will require analytical expertise and proactive approaches. Only after this shift in strategy and mentality has been institutionalized can the full advantages of system change be captured.