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The expansion of Philippine banks would need corresponding upgrade
in financial services system to maximize their revenues, a top
official of Fidelity National Information Services Inc. (FIS), a
provider of core processing for financial institution, said.
“Banks are struggling in processing
implementation. We see forms of difficulty in adopting the
technology,” John Haley, FIS Asia managing director, said in a
press briefing about the company’s plan to further provide the
banking sector with business models in credit card and automated
teller machine (ATM) processes.
American firm FIS is also a provider of card
issuance and transaction processing, and mortgage processing
services as well as related information products and outsourcing.
FIS expands its market by repositioning
its financial service solutions such as Fidelity Enterprise, which
will reduce the cost of innovation for large and medium banks as the
banking sector shows strong fundamentals.
Resources of the banking system continue
to rise on the back of growing deposit base and bank lending, while
asset quality has improved further as the non-performing loan ratio
moved to the pre-crisis level of about 4 percent.
The total resources of the banking system
rose by 9.6 percent to P5.088 trillion as of end-July last year,
according to the latest central bank report.
FIS also intends to provide branch and channel
type solutions, deposit products and insurance products.
The operating network of the banking
system increased to 7,738 in June last year from 7,693 in June last
year.
About 38 commercial banks, 83 thrift banks and
737 rural banks are operating in the country.
Miguel Warren, FIS Philippine account
manager, said many banks are concerned about the costs of IT support
and introducing innovation.
Warren said most of the organizations’
main issues are channel integration and interoperation of new
banking services. The adoption of the financial services would need
two years to implement before they become operational.
“The root cause of banks’ problems in ITS
support costs and costs of innovation has been wrongly attributed to
product definition and service,” he said.
He cited that many banks in Asia have
chosen to buy bank-in-a-box solutions from software vendors, which
means tightly integrated front- and bank-end retail solutions,
including software and implementation services.
FIS has established its local operations
in 1993 and cited the Philippines as its third largest client in
Asia, next to China and Thailand.
-- Maricel E. Burgonio
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