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July 14, 2024

Digital banks form alliance for global expansion

For the past year, a fierce competition has unfolded among six digital banks in the Philippines, each vying to be the premier digital bank in the nation while aiming for international prominence.

In pursuit of this shared ambition, these banks have set aside their rivalry and established the Digital Banking Association of the Philippines (DBAP), a grouping that has gained endorsement from the Bangko Sentral ng Pilipinas (BSP), akin to the Bankers Association of the Philippines.

The member banks of DBAP include UnionDigital Bank, Overseas Filipino Bank Inc., Tonik Digital Bank, UNObank Inc., GoTyme Bank Corp., and Maya Bank.

Emphasizing the significance of this collaborative effort, Bankero Henry Aguda, President and CEO of UnionDigital Bank, asserted that the establishment of DBAP is a “collective victory” that will propel Philippine digital banks into a prominent position on the global banking stage.

Despite the Philippines entering the digital banking arena relatively late compared to other Asian counterparts, Aguda remains confident that the nation’s banking sector is prepared to compete internationally.

The BSP’s endorsement of DBAP underscores the regulator’s dedication to the growth and prosperity of Philippine digital banks.

UnionDigital Bank, a subsidiary of Union Bank of the Philippines, is positioned as a frontrunner in the market, boasting approximately 75 percent of the market share in the digital banking sector.

Meanwhile, Maya Bank claims 61 percent market share and asserts its status as the most popular digital bank in the country.

UnionDigital Bank’s deposit base experienced a 113 percent growth to reach P20 billion by the end of June this year, with loans increasing by 126 percent to P13 billion.

On the other hand, Maya Bank reported 2.3 million depositors and P25 billion in deposits, solidifying its presence in the digital banking landscape.

In addition to the rivalry between these digital banks, the broader banking environment is undergoing a transformation, with the BSP considering reopening the window for digital bank license applications to accommodate further growth in this sector.

With the formation of DBAP and the intensifying competition, the future of digital banking in the Philippines is poised for substantial evolution and expansion.