Role of Technology in Banking

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In terms of technology being used, Philippine banks are at par with other banks in the Asia-Pacific region, according to one of the top business solutions provider in the United States.  “In two to three years’ time, the Philippines may become among the countries that have a topnotch banking industry,” said Francois Denimal, Sungard director for sales said.  Sungard  operates in 30 countries including the Philippines.  Denimal said that at the rate the banks are growing, financial institutions have no choice but to switch to better business solutions or upgrade their existing software and hardware.  Sanjay Varma, Sungard managing director for banks in Asia Pacific, said that mobile banking in the Philippines “has already taken off.”  “From your internet, the mobile phone have become an extension of the bank,” Varma said.  When asked to what extent Sungard participates in the development of the mobile banking services in the country, Varma said the area of development is dependent on the end-user of the software which is the bank.  The same goes to the security level and precautionary measures applied to every product.  “But we have a hacker to make sure that every loop hole in the system is blocked,” Varma said.  In terms of software pricing, Janice Gruenberg, Sungard country manager, said the price of the software varies depending on the scope of services the bank needs.  “It depends on the number of branches or the number of users,” Gruenberg said.  According to Varma, the current banking situation in the Philippines is very solid due to its strong liquidity.  “Philippines has very high liquidity which it can use for growth,” Varma said.  Denimal commented that Philippine banks are very conservative and traditional when it comes to their income generating vehicles.  “Interest rates are still the key indicators for net income,” Denimal said, adding that most banks in the Philippines and the region look at interest rates stress products, liquidity stress products, and balance sheet stress products.  Gruenberg said the conservative mentality of Philippine banks helped the system remain resilient in the current economic crisis.  “I think we remained unaffected by the economic turmoil because we do not have derivatives or treasury bonds in other countries which are very risky to trade,” Gruenberg said. MANILA, Philippines—Mobile banking in the Philippines is expanding into microfinance to serve the lower-income market outside of the country’s major urban centers. Tricia Dizon, head of financial services at Smart Communications, said in a statement the telecommunications giant was helping launch mBank Philippines. This planned mobile micronfinancing service provider is meant to deliver savings and loan products exclusively on a mobile platform to Filipinos with little or no access to the formal banking system. Regarding this effort, Dizon said Smart was working with PLDT-Smart Foundation, mobile microfinance holding company mBank Holding, Finnish development finance company Finnfund and Dutch development bank FMO. Dizon said pilot services were already being offered through mCompany, a nongovernment organization whose operations will spin off into mBank Philippines once regulators approve its application for a formal banking license. “Seven out of 10 Filipinos do not have an account at a formal financial institution mainly because of steep deposit requirements and the absence of banks in remote areas, but almost all Filipinos have a mobile phone,” Dizon said. “By offering simple and effective financial services, mCompany—and eventually mBank—seeks to increase financial inclusion and ensure that people have enough money at any given moment,” she added. Dizon explained that once mBank is launched, Smart and Talk ’N Text subscribers will be able to open a savings account with the help of mBank field agents deployed in their communities. Activated account holders can apply for a loan product that interests them, immediately...
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