Compared with other ASEAN economies, the Philippines has been ranked among those at the bottom in terms of financial inclusion indicators such as account ownership in a financial institution and saving at and borrowing from a financial institution. This presents vast opportunities for the country to improve access to financial services through virtual banking among the unbanked and underbanked. Being a branchless bank with lower operating costs compared to traditional banks, a virtual bank which relies solely on the use of technology to complete transactions is able to offer more competitive products and services such as higher interest rates for deposits and absence of maintaining balance requirements and lack of fees for low balances.
Moreover, with the restrictions in movement brought about by the VOCID-19 crisis, people are compelled to explore digital transactions including banking. This presents a huge potential for the growth of virtual banking in the Philippines. However, given the new business model of virtual banks with their associated risks, it is important to establish a comprehensive regulatory framework that would promote confidence in the sector and thereby encouraging investments as well as ensuring protection of users of digital banking services.