Thanks to Filipinos’ penchant for gadgets and smartphones, coupled by mobile phone banking services offered by major local telecommunication firms largely for the masses, the face of Philippine banking seems to be changing in favor of the wider segment of the Filipino population.
According to a recent report by one of the world’s oldest think tanks, the Philippines is the year’s most improved country in terms of digital and financial inclusion.
The US-based Brookings Institution released this August its 2016 Financial and Digital Inclusion Project Report subtitled “Advancing Equitable Financial Ecosystems,” covering 26 geographically, economically diverse countries.
The report highlighted that the Philippines made the biggest improvement in scores between 2015 and 2016 among all the countries covered by the study, with the Philippines’ overall score increasing by eight percentage points.
The countries were gauged in four aspects of financial inclusion: country commitment, where the Philippines scored 100 percent; mobile capacity, 94 percent; regulatory environment, 100 percent; and adoption of traditional and digital financial services, 42 percent.
“The increase (in Philippines’ overall score) was driven in part by the launch of its national financial inclusion strategy,” the report said, acknowledging the pivotal role of the Bangko Sentral ng Pilipinas (BSP), particularly in pushing for a high-level inter-agency Financial Inclusion Steering Committee.
The report also attributed the Philippines’ highest score increase to the country’s “strong performance in terms of mobile capacity” or the Filipinos’ penchant for smartphone use.
“For example, the Philippines boasts among the highest rates of smartphone penetration across our country sample,” the Brookings report stressed. “Along with Indonesia, it was the only lower middle income country to receive a top score for its level of smartphone adoption.”
Although pointing out room for improvement, the report also said the Philippines had the highest score in adoption of mobile money accounts among the South East Asian countries it studied, citing the use of mobile phone-based banking offered by major local telecommunication firms.
“While the Philippines held the highest adoption rate of mobile money accounts across FDIP countries in Southeast Asia as of 2014, there remains a significant untapped opportunity for increased take-up of digital financial services,” the report said. “Moving forward, one factor that may promote increased adoption of digital financial services in the Philippines is a recent mobile money interoperability arrangement between PayMaya Philippines (formerly Smart eMoney, Inc.) and Globe Telecom’s GCash service.”
Countering digital risks
Amid such digitalization, however, looms the risk posed by cyber crime.
For instance, online news portal EIN Newsdesk published an article quoting cyber security firm Trend Micro Inc. as saying that the banking and finance sector has become one of the more vulnerable industries to cyber attacks in the Philippines.
“We see a lot of ATM [automated teller machine]-skimming in the Philippines, which we don’t see in other countries anymore because other countries accept chip and pin,” the online news portal quoted Trend Micro Chief Technology Officer Raimund Genes as saying.
In line with this, the BSP issued on Tuesday (August 23, 2016) a public reminder on how financial consumers can protect their personal identification numbers (PINs) and passwords specifically against identity theft.
The BSP advises financial consumers to always choose a PIN or password that is easy to remember but is not based on obvious personal information, such as birthdays, anniversaries, addresses, or telephone numbers.
The BSP also urges financial consumers to refrain from using easy-to-guess entries, such as “password” or “123456,” but instead combine characters like symbols, punctuation marks, numbers, and uppercase and lowercase letters.
It is also wise, the BSP says, to regularly or systematically change PINs and passwords and not using a single PIN or password for all financial accounts, as this provides identity thieves easier to access financial accounts.
The Philippine central bank is also advising financial consumers to strictly avoid divulging their PINs and passwords to anyone—even families and friends.
“The BSP promotes financial education and financial consumer protection in view of its belief that consumers who can make well-informed financial decisions are reliable partners in fostering financial stability,” the Philippine central bank said.