Beyond Banking: How Southeast Asia’s Oldest Bank Stays Ahead
Southeast Asia’s oldest bank has a long history of innovation.
The Bank of the Philippine Islands (BPI) was the first to introduce through-the-wall 24/7 automated teller machines in the Philippines in 1983. Eight years later, it became one of the earliest adopters of phone banking. And before the turn of the millennium, it ventured into online banking at a time when the idea was still unfamiliar.
So when BPI realized it needed to substantially upgrade its digital capabilities in 2016, it didn’t hesitate to rewrite its story once again. This time, it looked to phase out old technologies and undergo aggressive digital transformation to continue delivering exceptional experiences for its customers. From increasing its agility in product and service development to building more robust analytics and migrating to scalable cloud solutions over time, BPI recognized technological modernization as a business imperative.
“We all know that in order to compete in the new world, you can’t compete with an old weapon,” says Noel Santiago, Chief Digital Officer at BPI. “We were operating our digital channels in the old world, where it still looked like the .com days. It was getting things done, but we knew that it would no longer scale. It would no longer be able to sustain the demands of the new world and the new customer segment we were looking at.”
Over the next two years, the 170-year-old bank progressively overhauled its digital capabilities. Strengthening its digital ecosystem through vast and strategic partnerships with API partners was a priority that opened the way for nearly 800 new products and services. Through a consistent push, BPI doubled its digital customer base from over two million in 2019 to four million in 2020, and grew its transaction volume fourfold within the same period – placing it in a strong position to take more risks, welcome more users and consistently deliver unparalleled service.
“We all know that in order to compete in the new world, you can’t compete with an old weapon."
— Noel Santiago, Chief Digital Officer at BPI
Ahead of the Curve
BPI’s digital shift couldn’t have been more timely – or prescient. When 12 million new digital consumers across the Philippines shifted their spending online between the start of the pandemic and the first half of 2021, the bank was ready.
“The pandemic was a game-changer for greatly accelerating the Filipino consumer’s digital propensity,” explains Santiago. “This posed both a challenge and an opportunity to reinvent banking by creating a more inclusive and digitally enabled lifestyle for Filipinos. Fortunately, BPI invested early. We put up the foundation early, so it was just a normal day for us.”
And as new habits become a way of life, with Filipino consumers on course to more than double the gross merchandise value of the country's digital economy from $17 billion in 2021 to $40 billion by 2025, BPI is constantly thinking of new ways to enhance the customer experience and stay ahead of the curve.
Going Global
In a country that’s getting younger – with millennials and Generation Z making up nearly 70% of its population – and spending more time on their phones than any other country in Asia, a strong and expansive international presence is key to meeting digitally savvy consumers’ evolving needs.
“Mobile-first Filipinos are prolific shoppers of both local and international goods. This is evident in every payday and double-digit sale hosted by local e-commerce apps such as Shopee and Lazada,” observes Santiago.
To fully unlock its open banking and global digital payment ambitions, BPI needed to create a differentiated online shopping experience that connects the Philippines retail market with leading global brands not readily available in the local market.
Another First
BPI achieved this vision through its latest partnership. In June 2022, it became the world’s first bank to partner Alipay+ as a mobile payment provider, enabling it to extend its payments service beyond local merchants by connecting Filipino consumers with Alipay+’s extensive global and regional online merchant base.
As Cheng Guoming, General Manager of Global Partnerships at Alipay+, notes, “Digital payment is not only about mobile wallets, but also includes banking apps and other digitized payment methods. We are excited to partner with BPI, one of the largest and most trusted banks in the Philippines with a loyal customer base, to make regional and global brands more accessible to local consumers and alleviate cross-border payment pain points.”
With BPI now available as a payment option for Alipay+-enabled global online merchants across the fast-growing sectors of e-commerce, digital entertainment and O2O, leading global brands like Agoda, Apple, Foodpanda, Google and SHEIN will soon be at the fingertips of BPI’s five million online banking customers. And they will be able to pay directly using their BPI Online credentials for a more convenient, familiar and seamless global payment experience than before.
Greater Growth Ahead
As Southeast Asia’s 350 million digital consumers spur the region’s digital economy toward $1 trillion in GMV by 2030, the Philippines is on track to become its fastest-growing market.
“We aim to better serve and engage the now digitally savvy customers by continuously innovating and expanding our digital ecosystem of partners and merchants for an enhanced digital experience that goes beyond banking,” says Santiago.
In a country where around one-third of the population has yet to consume online services while the rest embrace the digital economy at an unprecedented pace, even greater growth is on the horizon, and Alipay+ and BPI are just getting started.
