Experts on future-proofing PH banks, revolutionizing insurance

Going against the norm when adapting growth strategies may be key.

Bankers, insurers, and financial experts tackled strategies on how to future-proof the banking system and revolutionize insurance in the ABF and IA Forum - Manila 2024, held at Makati Shangri-La, Philippines on 1 October 2024.

Patricia Buenaventura Nichol, partner & office head, Bain & Company, kicked off the forum for the 286 attendees with a keynote speech on the developments that will shape the next generation of financial services.

Nichol tackled the buzzword on every banker’s lips today: generative AI. This, along with cryptocurrency and digital assets, will redefine the way banking operates today, she said.

“When you look at global banks that have successfully implemented technology, you see that their focus on innovation was not just about following trends but making strategic investments in technology that provided a competitive edge,” she said.

“It involves separating short-lived fads from long-term technological advancements that warrant substantial investments,” she added, saying that that persistent focus on technology even as its hype fades would differentiate successful banks from others. 

Central bank Deputy Governor Chuchi Fonacier followed with a discussion on how they are future-proofing the Philippine financial system.

Fonacier said that the Bangko Sentral ng Pilipinas (BSP) is aiming to roll-out regulations for a digital marketplace banking model in the next couple of months.

She also touched on the possibility of new digital banking players, saying that they will only give out licenses to players who can offer “unique” business models. 

Prospective players have been reaching out to the BSP even when there was a moratorium on issuing new licenses, Fonacier said.

Fonacier’s session led straight to the first panel discussion of the day, where XiXun Asia CEO and founder Fridolin Blumer moderated talks on how to embrace digital disruption in banking and insurance.

Amidst tech developments discussed, RCBC’s Lito Villanueva, Executive Vice President, Chief Innovation & Inclusion Officer, Digital Enterprise & Innovations Group Head, reminded people that changing an organization does not just involve embracing technology. 

“Technology is just an enabler, but at the end of the day, the main engine of change and of growth is your people, the culture,” Villanueva said in the panel, where he was joined by Jun Palanca, Country Manager for the Philippines at ING; Mila Bedrenets, Chief Growth Hacker of Tonik; JC Principe, Former FWD Technology Leader; and Nishi De Silva, Senior Vice President, Shared Services CTO of Security Bank.

KPMG’s Emmanuel Bonoan followed with a discussion on one of the finance industry’s biggest buzzwords in 2024: generative AI.

Bonoan, who is vice chairman & COO as well as head of advisory for KPMG, noted how gen AI has enabled their staff to move away from routine yet time-intensive tasks.

“Our lawyers and our tax division, at KPMG Philippines, now use AI to help them make good decisions for our clients to help maximize their tax efficiencies. That's just one example of how we are using AI,” Bonoan said.

Bonoan did not shy away from discussing the challenges of adopting and using AI. 

“Conversations we have with technology leaders suggest they are inundated with requests from the business for Gen AI support. So, it's worth taking a step back from the hype to really understand what Gen AI is, what it can do, and the risks and opportunities involved,” he added.

Human at the core
BDO’s Carlo Nazareno emphasized the importance of hybrid banking in his speaking session.

“A client should be able to take any transaction from a physical journey into a digital journey, and vice versa,” said Nazareno, who is senior vice president and head of cash management services at BDO Unibank.

Nazareno also tackled the need to transform branches to a “reachable” form— such as kiosks or machines— to reach more unbanked individuals, especially in the provinces.

Deloitte Philippines’ Anna Marie Pabellon led the second panel session of the day around a discussion with leaders of Philippine digital banks on shaping the future of finance.

Just like Nazareno in an earlier speaking session, GoTyme Bank’s director of technology and operations Gigi Puno highlighted the need for having a human representative to guide the customer.

“We believe that the more digital the world becomes, the more human the bank needs to be,” Puno said, calling it GoTyme Bank’s “battlecry.” 

Fellow panelist Angelo Madrid, President, Maya Bank reflected on the rapid development of digital banking in the country.

“Two years ago, you guys weren't using digital banking apps, right?” Madrid said, directly addressing the crowd after asking how many use digital bank apps. 

“I think that's what's exciting about it. The technology is there, and then AI is an amplification of how you're able to utilize data to really personalize those experiences,” he added.

UNO Digital Bank chairman Kalidas Ghose also highlighted the rapid development of technology, which in turn enables one of their key strategies for growth: partnerships.

Ghose hailed partnerships as key to how they were able to scale 2 million customers in just 18 months since launch, saying that it would have seemed “impossible” without it.

“On the challenges side, I would say the issue of a unique ID for the country is crucial. Having a unified ID system will revolutionize the whole access to credit aspect in the Philippines,” Ghose added.

Union Digital Bank’s chief treasury officer Krystle Mei Ambrosio discussed how partnerships with institutions helped them scale their agri-focused financial products.

“We've also embedded finance and partnered with institutions like M-Well to foster healthcare and provide healthcare opportunities for both onshore and offshore customers, while also aiming to meet the agricultural finance requirements set by the BSP,” Ambrosio said.

Against the norm
Kearney partner Kevin Kwek opened up the afternoon session, where he discussed banks’ strategies across Southeast Asia.

Kwek noted that some Philippine banks are diverging from the norm. For example, BDO is opening more branches every year, a direct contrast to other banks that are winding down their branch system in favor of heavy investments in technology.

The key lies in shifting the role of a branch. A contact center, for example, takes a whole load of work from a branch, allowing a bank to start thinking how to reposition their branches for more value-added consultative things, Kwek said.

BSP director Melchor T. Plabasan followed with a session on cyber resilience, taking inspiration from past discussions on tech developments during the forum.

The central bank’s top priority is to develop a cyber governance program for boards and senior management, emphasizing the importance of awareness about cyber-related incidents, said Plabasan, who is the BSP’s director, Technology Risk and Innovation Supervision Department (TRISD).

Plabasan shared that they will soon release a cybersecurity maturity model to ensure comprehensive cybersecurity standards.

GCash’s chief risk officer Ingrid Beroña shared the e-wallet’s push for financial inclusion, sharing that 74% of its over 70 million customer base is located outside of Metro Manila.

Embracing hyper personalization
The afternoon also featured a panel session on revolutionizing insurance, moderated by Caesar V. Parlade, Managing Partner for Advisory and Digital Transformation Solutions, Reyes Tacandong & Co.

Inclusion is one. Insular Life president and CEO Raoul Antonia Littaua shared that they now accept same-sex couples for insurance.

Meanwhile, Singlife Philippines CEO Lester Cruz said that the approach to customers through digital will have to change.

“Oftentimes, when we talk about digital, people talk only about affordability. When in reality, it doesn't matter how cheap or how affordable the product that you bring into the market is, if it does not bring value, at least to the customer's expectation, then nobody's going to be picking it up,” Cruz said in a panel that was also attended by Prahlad Agarwal, CFA, Chief of Staff & Head of Strategy, Manulife Philippines; and Anthony Louis Gunzon, Chief Marketing Officer, Malayan Insurance Co., Inc.

The final panel of the day is a banking and insurance hybrid, where moderator Alvin Dave Pusing led a discussion on customer-centric banking and insurance in the Philippines.

Pusing— who is director of Financial Services and Risk Consulting in PwC— was joined by BDO’s Nazareno along with Tricia Tan, Chief Marketing Officer, Security Bank; Noel Tordesillas, Head of E-Channel, Business Channels, Etiqa; Isabela Rae Ver-Bibal, Head for Client Experience, Sun Life Philippines; and Maria Cristina L. Go, Head of Consumer Banking, BPI.

BPI’s Go noted the challenges for legacy banks to offer hyper-personalized services.

“You talked about personalization and personalization at scale. It’s a continuum because we're all coming from traditional marketing and legacy technology systems. This journey involves moving from macro-segmentation to micro-segmentation and eventually to hyper-personalization,” Go said.

Go said that data governance and structure are crucial in order to achieve this. 

“Ensuring consistency in delivery across human interactions requires continuous upskilling and bridging organizational silos through shared goals and incentives,” Go added.

Sun Life Philippines’ Ver-Bibal, meanwhile, emphasized the need for organizations to be “customer obsessed”

“One initiative we're proud of at Sun Life is our insights activation programs. It's rare to have multidisciplinary teams in the same room with clients, co-designing products or services based on real-time feedback,” Ver-Bibal shared.

This is part of the need for banks and insurers to “ask the right questions” to their customers.

“If you can ask the right questions, you'll uncover more about your clients' needs, which leads to experimentation. If you have the tools and platforms to test your ideas, you can validate your hypotheses quickly,” she added.