Kiosks, hybrid approach key to financial inclusion: BDO 

BDO has introduced self-service kiosks and universal machines to entice unbanked customers.

Hybrid banking should extend not just to offering physical and digital channels, but to the services itself— with a client being able to start a transaction in a branch and finish it digitally if they want to, said the cash management head of the Philippines’ largest bank.

“A client should be able to take any transaction from a physical journey into a digital journey, and vice versa,” Carlo Nazareno, senior vice president and head of cash management services at BDO Unibank, told attendees of the Asian Banking & Finance and Insurance Asia Forum 2024 held at the Makati Shangri-La, Metro Manila, on 1 October 2024.

In his speaking session, where he talked about financial inclusion in the Philippines, Nazareno emphasized the need for this hybrid approach especially in the Philippines where about 1 in 2 adults still does not have a bank account. 

An estimated 43 million adults are now banked, making up 56% of the adult population, according to data from the Bangko Sentral ng Pilipinas. Whilst an  improvement from 19% bank individuals recorded by the Bangko Sentral ng Pilipinas in 2019, the share is still lower than the global average of 76% recorded by the World Bank. 

Apart from a hybrid set-up, Nazareno emphasized the need to transform branches from the usual cold glass and stone facades and offer more “reachable” forms— such as  kiosks or machines— and ensure that there’s a person nearby to help out would-be customers. 

“We’ve noticed that most people in the provinces especially, when they go see a branch or a bank, they're very afraid to go in. They say, ‘oh no, we're not dressed properly.’ They feel like they won't be treated properly,” Nazareno said, when asked about barriers to financial inclusion. 

BDO, for example, has introduced self-service kiosks, where clients can open bank accounts on their own.

BDO also now has universal machines: think of expanded ATMs that don’t just let you withdraw and deposit money, but also gives users the option to pay your bills or transfer funds between accounts, amongst other services.

Having that one person offer personalized assistance to the customer is still crucial, Nazareno told Asian Banking & Finance in a separate interview.

“If you have somebody in the branch that helps you and tells you,  ‘don't worry, we're here. We can help educate you, and introduce you to all of these digital kiosks. It will help [the customer] develop further, and hopefully make them open an account, and deal with banks,” he said.

Nazareno also said that banks should think of educating people to use digital “differently.” In the Philippines, for example, business owners are very traditional and are used to managing their business finances in a non-digital manager, making it challenging for them to shift to using digital tools.

“They pay their payroll by envelope, and they go to the branch every day, get the cash, or they pay their suppliers via check. So for those types of people, it's very hard to convince them to use digital, especially if they have already experienced being duped, or if fraud happens,” Nazareno said.

This time, there’s no other way to do it but to slowly introduce them to the channel.

“Let's say first to just get your statements [online]. So instead of going to the branch every time to get your passbook printed, you can get it electronically. Then we introduced a check writing capability,” Nazareno said, explaining that this allows a customer to authorize checks digitally, which will then print the checks for them.

“We will never force anybody to go digital, because that’s not where our client always wants to be,” he said.

“Cash Management also needs to make sure we cover all our bases depending on the maturity of the client [in terms of] their digital journey,” he concluded.