That is what a survey seems to indicate, with a surprising twist in age demographics …
Opening a digital banking account is rapidly becoming the norm in the Philippines, with 76% of consumers saying they would open some kind of financial account online.
May that is why a recent consumer digital banking survey found that 26% of Filipinos preferred to open a bank account on their phone, compared to 18% in the US and 25% in the UK.
Of those that would open a financial account online, 40% would consider doing so for an everyday transaction account, 38% for a credit card and 33% for a personal loan.
Bucking expectations, it was the older consumers in the Philippines who were more likely to be leading the digital push, with the youngest Filipinos being the laggards:
- 46% of those over 55 years of age said they would open a bank account online.
- 40 to 45% of 25-34, 35-44 and 45-54 year-olds said they would do the same.
- Just 28% of 18-24-year-olds would open a bank account online.
Said Subhashish Bose, the team lead for fraud, security and compliance for the company that commissioned the survey, FICO Asia Pacific: “Filipino consumers are digital natives. Around 40% of Filipinos have a smartphone and according to a recent study they rank in the top 10 mobile internet users globally, spending an average of 4.58 hours a day on their phones.”
Explained Bose: “The truth in the numbers here is far more nuanced. Younger Filipinos are adept at using smartphones and computers, however, many do not have the required identification forms to open bank accounts at a young age, don’t have regular income or are presented with bank account options that are not appealing. For example, many bank accounts in the Philippines require a minimum balance to avoid monthly account-keeping fees.”
As consumers’ reliance on online services grows in response to the current pandemic situation, Bose expect further shifts in adoption and an acceleration and acceptance in opening bank accounts digitally. “It is important that banks closely examine any points of friction in their application process to ensure consumers are not abandoning a process or switching to a competitor,” said Bose.
Account opening to be fully digital?
The survey found that a large percentage of Filipinos had an expectation that they should be able to complete all aspects of account opening online or on their phone.
Out of the regular identity checks needed to open an account, 67% of Filipinos thought they should be able to prove their identity by scanning documents or providing a selfie, 47% expected to prove where they live without going offline, and 45% said they should be able to set up a biometric such as a fingerprint scan at account opening. If all actions required to complete an account opening cannot be accomplished in-session, only 41% of respondents said they would carry out the necessary offline actions as soon as possible.
Also, around 33% thought they would eventually complete offline actions such as taking a phone call, posting documents, or visiting a branch. A further 13% said they would try a competitor, while 5% said they would give up completely.
Overall findings demonstrated that financial institutions in the Philippines that do not facilitate a completely digital account opening experience could lose over 40% of their new business. “There is research to show that only 6 to 9% of applicants move through the funnel and complete the process,” said Bose. “Banking executives should review the application completion for authenticated versus non-authenticated applications, as well as how many applicants with saved or abandoned applications return to complete the process.”