[FEATURING] CIMB looks to expand its product offerings

CIMB BANK Philippines, Inc. is looking to expand their offerings to include insurance and investment products, its top official said.

CIMB Bank Philippines Chief Executive Officer (CEO) Vijay Manoharan said their deposit and lending business is already “at scale,” noting they already have close to 800,000 loan customers coming from just about 10,000 in early 2020, so now they are exploring “protection” for their clients.

“Insurance, investment, I think, are the next areas that we will migrate to in a way that we work with partners, as a platform digital bank, to bring a joint solution with the market, exactly like what we have done for deposit and loans,” Mr. Manoharan said in a Zoom interview on Wednesday.

Currently, clients of the bank are eligible for free life insurance coverage worth their average daily balance for those with a minimum of P5,000 in particular accounts. This coverage is capped at P250,000 for every account holder.

“We are going to evolve that from the basic to a lot more offerings — different types of insurance, tailor-made, where you can subscribe and really get protection based on what you need,” he added.

Mr. Manoharan said they have seen a change in customer behavior in their platform amid restriction measures. Prior to the health crisis, he noted most would only use their accounts to deposit their savings monthly.

However, now, clients are using their accounts for bills payment, mobile top-ups and transferring funds, he said. With this, the average transaction per customer has increased by 67% year to date from 2020, he added.

Mr. Manoharan expects customer preference for online transactions is “here to stay” even after the health crisis as people have found convenience in the digital experience.

“I don’t see consumers, after the pandemic, rushing to branches, standing in line. I don’t see that coming back. This adoption is here to stay. Those that have converted will remain converts,” he said.

The central bank wants 50% of transactions, both in volume and value, done online by 2023. Officials are bullish this target could be reached sooner as the restriction measures due to the pandemic have caused digital payments to grow.

CIMB Philippines started its operations in 2019 prior to the release of the digital banking framework of the Bangko Sentral ng Pilipinas (BSP) in November 2020. It currently holds a commercial bank license from the regulator.

Based on the BSP’s framework, digital banks are set apart from other types of lenders because they carry out transactions through an online platform compared with the brick-and-mortar model of traditional banks.

Mr. Manoharan said they are still evaluating if they will retain their commercial bank license or convert this to a digital banking license.

“We are currently going through an extensive deliberation internally and with the regulators. But to us, really, whatever licensing framework we sit on, the most important thing is we are able to provide solutions to the consumers,” Mr. Manoharan said.

BSP Deputy Governor Chuchi G. Fonacier earlier said lenders like CIMB Philippines that have purely online services but started operating prior to the establishment of the framework are not required to convert their current permits to digital banking licenses. — Luz Wendy T. Noble