THE Overseas Filipino Bank Inc. (OFBank) officially became the country’s first “branchless-digital-only” bank after it secured a digital banking license from the Bangko Sentral ng Pilipinas (BSP).
According to the Department of Finance (DOF), the license was issued by the Monetary Board on March 25.
The OFBank, a wholly owned subsidiary of state-owned Land Bank of the Philippines (LandBank) Inc., commenced its banking operations in June last year using its then existing license to operate as a thrift bank, the DOF said.
A statement from the DOF called the issuance of the license a “milestone in the country’s banking’s history” that “not only fulfills President Duterte’s campaign pledge to create a bank that caters to overseas Filipinos but will also help the Philippines leapfrog to the digital economy.”
According to the statement Duterte “wanted a bank that would be trailblazer in terms of modernizing and expanding the scope of the services it offers to them.”
The conversion of the OFBank into a digital bank is the first phase of the three-stage licensing framework of the BSP on the establishment of new digital banks, the DOF said.
Last January, the OFBank submitted a Letter of Intent to the Supervisory and Policy Research Department of the BSP signifying its interest to be a duly-licensed digital bank. It then applied on February 1 for the conversion of its thrift bank license into a digital bank license.
The OFBank was launched virtually on June 29, 2020, as the country’s first branchless and digital-centric government bank.
It was in September 2017 when Duterte signed the Executive Order 44, paving the way for the creation of OFBank. The Philippine Postal Savings Bank Inc. (PPSB) was then acquired by LandBank and converted into OFBank.
The OFBank’s global digital reach spans 112 countries, with its clients able to access online the services of 763 merchants on-boarded in its mobile application.
These merchants include 124 utility and service companies, 186 educational institutions, 277 government agencies and local government units, 140 entities and 16 banks, credit card companies and insurance firms.
It also offers four digital products and services that includes a “Digital onboarding system with artificial intelligence” (Dobsai), which allows the real-time opening of a mobile banking deposit account on supported handheld devices.
As of end-2020, a total of 19,887 the Dobsai accounts in the OFBank have been opened with an outstanding balance of P104.37 million.
Aside from deposit savings accounts, the OFBank’s digital services also include fund transfers, bills payments and applications for multi-purpose loans. As of December last year, the OFBank’s electronic banking inflows from 45,997 accounts had transactions amounting to a total of P467 million while outflows from 62,633 accounts hit P372.41 million.
For the “Premyo Bonds” second offering, a total of 3,517 transactions amounting to P40.72 million were made by OFBank clients. As for the 25th Retail Treasury Bond offering, 380 transactions valued at P8.27 million were recorded and these were all coursed through the bank’s mobile application.