Digital banking offers Filipinos greater financial inclusion

The Philippines is home to a socio-economically diverse population of more than 100 million spanning more than 7,000 islands. Yet geographic and institutional barriers to accessing financial services mean that more than 70% of Filipinos remain unbanked. This is changing, with some significant new developments. 

The recent launch of the country’s first digital-only bank, Tonik, promises to advance digital payment services in the Philippines. These provide greater financial inclusion to the unbanked and underbanked and younger people such as millennials and Generation Z. 

Tonik operates on the basis of its own bank license, issued by Bangko Sentral ng Pilipinas (BSP). Spearheaded by a team of retail finance veterans who have experience building and scaling retail banks and fintechs across the global emerging markets, Tonik will provide access to deposit, payment, and card products on a highly secure digital banking platform. 

During the Covid-19 pandemic, a major concern for consumers has been the safety of their families and communities. In the Philippines, a community saving model known as the paluwagan is a shared pot that can be accessed by family members or friends when required. Tonik is offering a similar experience in the digital realm through the “group stash” feature. 

Key aspects of the digital bank are these groups, as well as solo, stashes. Group stashes allow several people to place money in a shared pot and see as much as 4.5% interest per annum. Solo stashes mean that consumers can put their money into savings goals and earn as much as 4% interest each year.