Country _ Name
Online banking services
FinTechs belonging to this area offer traditional banking services in a modern way, usually through online services or mobile applications as well as ancillary services – e.g. enabling customers to manage their giro- or custody-accounts online and in real time or offering e-wallet services. Keywords in this context are also API-Banking or Banking as a Service (BaaS)/ Bank as a Platform (BaaP).


API stands for application programming interface and is offered to access data banks and to extract and insert information. API-Banking consequently means the access to data banks of banks to offer new and innovative banking applications.

Through these services FinTechs offer services with new functions, e.g. enabling customers to manage their accounts online and in real time.

BaaS – Bank as a Service/BaaP – Bank as a Platform:
The API-based Bank as a Service platform has a full banking licence, but merely serves as the back end for standalone independent FinTechs, which “use” the licence and the back end of the bank to offer new financial services, launch additional financial products or expand into additional markets.


Attitude of the country towards online-banking services

There are major issues with local entities seeking to render services and riding on the banking license of a Bank as a Service (BaaS) provider. The BSP will require a provider of online-banking services to have its own set of licenses, especially BSP-issued licenses.

Owing to COVID-19 pandemic restrictions, the Philippines saw an increase in use of online-banking services. However, there remains to be a strong preference for brick-and-mortar banking. Certain environmental factors,such as  trust and facilitating conditions, inform the banking public’s reliance on online-banking and the local industry has faced challenges in cultivating trust in transacting online. Recently, for example, account holders of a major universal bank were reportedly victimised by an online banking scam, where they lost money through unauthorized transfers. Further, while the BSP has encouraged the use of FinTech solutions to achieve its goal of reaching the unbanked population, it has also issued a moratorium against the issuance of new digital banking licenses. According to the BSP, the moratorium will allow it to closely monitor the impact and performance of digital banks. 

Legal affairs

Obligations and requirements to provide online-banking services described above

An entity intending to operate as a digital bank, which refers to a bank offering financial products and services that are processed end-to-end through a digital platform and/or electronic channels with no physical branch/sub-branch or branch-lite unit offering financial products or services, should obtain prior authority from the BSP. The minimum capitalisation of digital banks is PhP1 billion (approx. US$19,182,820). As set out in the regulations, a digital bank is subject to the prudential requirements set out by the BSP including corporate governance and risk management, particularly on information technology and cyber security, outsourcing, consumer protection and anti-money laundering and combating the financing of terrorism, as provided under existing regulations. A foreign individual or a foreign non-bank corporation is allowed to own up to 40% of the voting shares of a digital bank, while a qualified foreign bank may own up to 100% of a digital bank. Voting shares of stock of a Filipino individual or a Philippine non-bank corporation in a digital bank should likewise not exceed 40%. T
here are other applicable restrictions on ownership of voting shares of a digital bank.

Banks intending to offer electronic and payment services, which are products and/or services that enable consumers to carry out or initiate payments electronically, financial transactions and other related services through a point of interaction, should also obtain prior BSP approval.

Persons or entities intending to provide services in the Philippines would generally be considered doing business in this jurisdiction and therefore, must also register and obtain a primary license from the SEC. This entails submission of documentary requirements with the SEC depending on the corporate vehicle (subsidiary or branch) intended to be established.

Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area


Economic conditions

Market size for online-banking services and biggest companies in this business area

There is a big potential for online banking services to grow more in the Philippines. Based on the 2020 Financial Inclusion Initiatives Report prepared by the BSP, 69% of adults own a mobile phone, but only 12% of mobile phone users use it for financial transactions, and 53% of adults use the internet, although 9% of internet users use it for financial transactions. In a document titled BSP Digital Payments Transformation Roadmap 2020-2023 as prepared by the BSP, the objective of BSP is to convert 50% of the total volume of retail payments into digital form and expand the financially included to 70% of Filipino adults, by onboarding them to the formal financial system through the use of payment or transaction accounts.

There does not appear to be a publicly available list of banks in the Philippines which have been granted the authority to engage in electronic banking (e-banking services) by the BSP. Based however on BSP’s website, there are only two banks which hold a digital bank license.

Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area




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