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April 12, 2024

Branch-lite units surge as Philippine banks adapt to digital age

The Bangko Sentral ng Pilipinas (BSP) is waving the green flag for digital banking.

In the fourth quarter of 2023, approvals for traditional bank branches took a nosedive, with just one application getting the green light compared to five in the previous quarter.

Why the sudden shift? Filipinos are ditching the teller lines in favor of the convenience of e-wallets and online transactions.

Rural and cooperative banks are leading the charge in this digital revolution. They submitted 13 BLU applications in the last quarter of 2023, with only one seeking a regular branch. Even big players like BDO Unibank are hopping on the BLU bandwagon, opting for one in Angeles City.

While Security Bank Corp. bucked the trend with seven new regular branches, the overall trend is clear. The convenience of digital banking is winning over Filipinos, and the BSP’s approvals reflect this shift.

As of February 2024, the BSP supervises a diverse network – 44 big banks, 42 thrift banks, and a network of 388 rural and cooperative banks. The Philippines currently boasts 12,877 bank branches, but with the rise of digital services, the future of banking is likely to feature fewer physical spaces and more digital convenience.

The BSP seems to be getting ahead of the curve, promoting a more streamlined and tech-driven financial ecosystem for Filipinos.

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