BDO cites birthing pains in digital shift

Sy-led BDO Unibank Inc. on Wednesday admitted to birthing pains as it shifts more into digital operations, but noted that it will continue to expand its branch network to penetrate more of the country’s unbanked population.

According to BDO president and chief executive officer Nestor Tan, the lender’s thrust in digital is threefold — cybersecurity, infrastructure and operations, and its products.

Tan said BDO has already completed most of the major investments in cybersecurity, leaving mostly maintenance investments as it feeds some 2.6 terabytes of data each day.

In terms of infrastructure and operations, the bank has put in place next-generation information technology which allows its operations to be scalable, agile, and flexible.

This includes the use of biometrics and quick response (QR) codes for cardless automated teller machine (ATM) transactions, which clients have recently cited as having difficulties to use.

Products have also started to shift to digital, covering online services and account opening. The firm is migrating its existing products into more modern technology on top of the existing infrastructure.

“Now, since this is new technology, it’s not been easy for us to do this. So we did have some birthing pains as a result,” Tan said during the firm’s annual stockholders meeting in Pasay City.

“So if you look at our technologies — cybersecurity, infrastructure and operations, and products — now products is like the tip of the iceberg that you see. The other two is below the iceberg or below the water level, which is probably bigger, more important… So those are the things that we’re focusing on,” he added.

Moving forward, Tan said the company will continue to expand its branch network, citing the country’s financial inclusion rate of 30% to 40%, and close to a third of cities and municipalities still not having a formal banking presence.

“I think financial inclusion will start with them creating banking relationships for deposits and loans, then we can move them to digital. There’s no question that the trend is to move to digital,” he said.

“The question is how fast, and we cannot really turn our banks and the preference happens to have a combination of physical and digital and that is what we have experienced,” he added.

The company currently has over 1,600 consolidated operating branches and over 4,600 automated teller machines (ATMs) across the country. It also has 16 international offices including in Asia, Europe, North America, and the Middle East.

Shares in BDO closed Wednesday up P1.60 or 1.25% at P129.50 apiece.—AOL, GMA Integrated News