Philippines, Thailand, and Vietnam's virtual banking market

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In January 2020, Albay Representative and chairman of the House Committee, Joey Salceda filed House Bill 5913, which provides a regulatory framework for virtual banking to boost the financial inclusion thrust. The bill aims to tap the under-served market of the country at a lower cost, a key characteristic of virtual banks.

“Marrying widely accessible digital platforms such as mobile phone applications with conventional banking strategies such as deposits and micro-lending, virtual banks are able to provide financial services at much more favorable rates, as they do not incur such expenses as establishing and securing branches and maintaining automated teller machines (ATMs),” – Joey Salceda.

Current scenario

“Branches were designed to handle physical forms of cash and cheques, as secure transaction centres. This is the core reason why everyone thinks that branches will disappear because they are not retail stores, engaging the brand community, but instead transaction centres run like some administration process.” – Chris Skinner, Author of Digital bank

Currently, ING Bank NV and CIMB offer digital banking services to Filipinos through their respective platforms. Additionally, in 2018, Maybank Philippines launched MOVE (Mobile Optimized Virtual Experiences). According to the bank, it is the first integrated digital offering to simplify and enhance its financial services.

However, Tonik Digital Bank Inc., a subsidiary of Singapore-based Tonik financial received approval from Bangko Sentral ng Pilipinas (BSP), Philippines central bank. The approval enables the bank to offer services such as retail banking, deposits, and consumer loans, digitally.

Tonik financial introduces the first pure-play virtual bank in the Philippines with US$ 6 million raised in equity capital to bank the 70% unbanked adult population in the country. It raises capital from venture capital investors Insignia Ventures Partners and Credence Partners along with regional and angel investors. As per the bank, it will partner with Finastra’s Fusion Essence cloud platform to build its end-to-end banking capabilities and support its launch in the region.

“Digital-only banks globally have successfully demonstrated their ability to take massive market share by launching hyper-compelling consumer propositions, while also operating at disruptively low unit costs. We believe that the regulator’s confidence in us serves as the testament to the unique strength and track record of our team and the attractiveness of our product philosophy.” – Greg Krasnov, founder & CEO of Tonik


Within Thailand, The Bank of Thailand is studying licenses for virtual banks and there is no formal license policy currently in place. To keep up with the global  virtual banking trends, in March 2019, United Overseas Bank (UOB Thai) announced the launch of TMRW. TMRW is the first mobile-only bank in Thailand that enables its customers to open a bank account and to authenticate their identities without having to visit a branch.

Current scenario

TMRW is the first virtual bank (mobile-only) launched by United Overseas Bank (UOB), Thailand in March 2019, primarily for the digital generation. The virtual bank operates within the banking license of UOB as there is no formal policy in Thailand for virtual bank establishment. Customers onboard on the TMRW banking platform by uploading an identification proof while authenticating their identities at a self-service TMRW kiosk placed in 200 locations across Bangkok.  

Mr. Yuttachai Teyarachakul, Managing Director, Country Head of Personal Financial Services, UOB (Thai), said “TMRW is built on insights to enrich the customer experience for the digital generation. In speaking with millennials, we found that while they appreciate relevant guidance to help them keep track of and manage their finances better, they respond better to prompts that are fun and that do not make them feel guilty. One of TMRW’s most popular features among the 1,500 customers who joined our pilot program in Thailand was a money management game to help customers meet their savings goals in fun-sized, achievable steps. TMRW’s language is also free from banking jargon and is easy to understand.”


While Vietnam has 40% of its adult population unbanked as per the World Bank’s financial inclusion 2017 report, it is yet to adopt the far-reaching potential of banking sector digitalization. Most incumbent banks are exploring opportunities to create web offerings and digital platforms. However, the Vietnamese regulatory authorities are still at the backdrop of forming virtual banking policies.

Current scenario

To embrace the virtual banking revolution in APAC, Vietnam’s Viet Nam Prosperity Joint Stock Commercial Bank (VP Bank) and Global Online Financial Solution launched the first bank without branches named “Timo” in 2015. Timo, an abbreviation to “Time & Money”, is a digital banking platform offering banking facilities to its customers by inviting them to hybrid coffee shop-banking centers and helping the customers onboard on its digital banking platform. As a result, the bank cannot be characterized as a digital-only/ virtual bank but offers its customers non-traditional banking experience through these shops.

However, Vietnam Maritime Commercial Joint Stock Bank (MSB) is planning to adopt Mambu’s cloud-native banking platform to launch Vietnam’s first digital-only bank by the end of 2020 under its proprietary banking license.


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