Why the digital transformation of the financial sector matters AMID the global Covid-19 crisis, the Philippines saw an increasing number of people transacting through digital platforms, with a 5,000-percent surge in digital payments in 2020. This resulted in the enactment of a bill, known as the “Promotion of Digital Payments Act,” which aims to promote the use of digital payments in the Philippines while simultaneously increasing the participation of unbanked citizens.

The Bangko Sentral ng Pilipinas (BSP) aims for 70 percent of adult Filipinos to have bank accounts by 2023 as part of its digital transformation and financial inclusion bid. Speaking to The Manila Times, Ajit Melarkode, vice president for Asia Pacific & Japan (APJ) at Dell Boomi, shared his insights on the state of digital transformation in the Philippines’ financial sector and what the sector could learn from global trends and tech industries.

The Manila Times (TMT): Please describe the state of digital transformation in the Philippine financial sector. What are the sector’s prospects in the post-pandemic period?

Ajit Melarkode (AJM): As an unintended outcome of the pandemic, the Philippine central bank is driving businesses to capitalize on the rise of digital transactions and provide Filipinos with much-needed online financial services. According to the Bangko Sentral ng Pilipinas, the public health crisis increased the volume and value of digitally driven transactions. Fintech applications and technologies have seen significant and continuing improvements, enabling an increasing number of Filipinos without a bank account to access financial products and conduct transactions. Fintech solutions, including e-wallets, enable customers to move funds digitally and establish credit, thereby making access easier to funds. This unprecedented growth in digital financial services has redefined the Philippines financial sector.

TMT: Does the Philippine financial sector need to fast-track the digitalization of its financial sector? Which areas in banking could be digitalized faster?

AJM: According to the BSP’s Digital Payment Transformation Roadmap, digital banking is integral to the ongoing modernization and development of the sector. The BSP has outlined a bold plan to convert at least 50 percent of total retail payments to digital and to integrate at least 70 percent of adult Filipinos into the financial system through account ownership and transform the nation into a cashless society.

Fundamentally, a modern digital financial sector ensures multiple benefits including an enhanced customer experience, greater corporate governance and more efficient data-driven decision making. In that regard, a unified, low-code data integration platform to connect devices, online payment systems, APIs and applications with legacy banking operational systems provides a host of benefits for financial services companies looking to compete in the new world of digital banking and finance.

TMT: How could banks benefit from automation and integration of their systems? What are the advantages for bank clients?

AJM: Choosing the appropriate jobs to automate is crucial to achieving success. The integration of RPA and workflow software could automate whole procedures, such as requests for customer service and loan approvals. By automating their operations, banks are provided with the tools necessary to meet the distinct demands and desires of individual consumers. Personalization increases client response and conversion rates, as well as marketing investment returns.

Banks especially need to be responsive and address customer demands at speed. To compete and continue to grow, the Philippine financial sector needs to address the ever growing problem of data management by becoming more data driven. Being able to provide the superior experience to customers in the metros as well as the provincial towns requires significant coordination, logistics and data.

TMT: What insights could the financial sector learn from global trends and tech industries?

AJM: Rising consumer demands as well as having a seamless customer experience has forced industries to relook at how they manage their data effectively. A crucial deterrent for banks is the predominance of data silos and replicated processes between different lines of business.

For financial institutions to enhance customer experiences in the digital age, banks need to break down data silos through integrated processes, and structuring IT around application programming interfaces (APIs) enables applications to communicate with each other from the start. They need to instantly connect everyone to everything with a simplified, intelligent and automated platform. As a cloud-based integration platform, Boomi makes it easy to connect applications and data without the costs and complexities of traditional middleware or custom coding. Financial services companies use Boomi’s technology to connect any combination of cloud-based and legacy on-premise systems, transforming themselves into more transparent, data-driven organizations focused on efficient and customer-centric operations.