The Importance of Online Banking and Its Social Implications

The Philippine financial industry has undergone a remarkable transformation in recent years. Coming from a cash-reliant community, the country has rapidly embraced digital banking solutions—especially after the COVID-19 lockdown. With the restrictions imposed at the height of the pandemic, financial institutions leveraged the benefits of online banking for customers to ensure the continuous cash flow of citizens despite the health crisis.

But, what is online banking really and how does it affect the Filipino community?

This article dives into the significant role digital banking plays in our lives. We explore how it has impacted day-to-day activities, offering Filipinos a convenient, secure, and empowering way to manage money.

Online Banking in the Philippines

With the rise of financial technologies in the country, you may be wondering whether online banking is a trend or another fad. The answer is simply: no, it’s not a fad. The digitization of banking is here to stay and is currently evolving at a fast rate to accommodate the needs of consumers. In fact, the online penetration of digital banking in the Philippines is estimated to increase by 34.85% from 2024 to 2029, demonstrating its sustainability in finance.

Gone are the days of long queues and limited banking hours. With access to digital banking, you can manage and conduct financial transactions through a secure internet connection, anytime and anywhere. Just by registering for an online banking service with your chosen bank, you can set up your login credentials to access a user-friendly banking webpage or an online banking mobile app.

To use digital banking, here’s a simplified breakdown of how this technology generally works in the Philippines:

• Open a Bank Account: Before being able to access an online bank account, you need to open either a savings or checking account with your preferred bank (if you don’t already have an existing one). Why do you need to open a bank account? Your bank account is the initial relationship you form with your bank so that they may provide you with their services. You typically need a bank account to register for online services.

• Login: Access your bank’s online platform using your registered login credentials. The bank will either ask you to create an account on their website or by downloading their mobile application on your phone.

• Account Management: Once you’re granted access to the app and your account, you can view your account balance, transaction history, and other account details.

• Financial Transactions: You can use your digital account to perform various transactions, including fund transfers to other bank accounts, bill payments, mobile phone load purchases, and online shopping payments.

• Investment Options: Some banks offer investment options through online banking, including mutual funds, Unit Investment Trust Funds (UITFs), insurance, and other investment products.

• Customer Support: Typically, your banks offer online customer support resources on their web pages or mobile apps. You can access FAQs, chat support, or email support for assistance with any issues you may encounter.

Naturally, the specific features of each financial institution’s online platform differ slightly depending on the bank you’re using. However, the core functionalities remain consistent offering easy access, convenient transactions, and real-time management of your finances.

Impact of Electronic Banking in the Philippines

Digital banking in the country has become a necessity for most Filipinos. Nowadays, cashless transactions are the ideal payment method with consumers opting for card-based payments and mobile wallets for online shopping.

Other reports show that just from 2022, 40% of payment transactions were made online because users prefer this payment method for paying bills, fund transfers to family and friends, and deposits. This data underscores the importance of online banking in the Philippine market—establishing the need for digital financial services. 

Other reasons online banking ecosystems are highly significant in current times are:

Convenience and Accessibility

Filipinos in remote areas or those of you with busy schedules can now access banking services 24/7. This eliminates the need to travel to physical branches during limited hours, saving you valuable time and effort.

Financial Inclusion

Online banking empowers all Filipinos without a nearby bank branch to participate in the formal financial system. This is particularly impactful if you live in the underbanked population who previously had limited access to traditional financial services. 

Before the digitization of banking, there was a relatively low penetration rate for banking services especially in the rural areas in the country. Now, 65% of Filipino households have bank accounts due to the accessibility of online financial services. 

Security and Transparency

If you’re wondering how safe online banking is, it’s worth noting that banks in the Philippines invest heavily in online security measures to protect user data and transactions. The Data Privacy Act of 2012 ensures that financial institutions take necessary measures to protect your data from fraudulent activities.

Additionally, online banking often provides real-time transaction tracking and account information updates. This fosters greater transparency and control over your finances.

Efficiency and Cost-Effectiveness

FinTech focuses on streamlining tasks like bill payments and fund transfers, saving more time and resources compared to traditional methods. Instead of having you go to the bank to process different types of transactions—incurring more fees per transaction processing, you can now do them wherever you are at a lower cost.

Cashless Transactions

Increased online banking adoption encourages more cashless transactions for Filipinos. This can lead to a more efficient exchange of funds and stimulate the country’s economic growth by making financial services more accessible to businesses and individuals.

Overall, making financial management available online has proven to be beneficial to the Philippine society. Not only is it a practical leap in financial management, but also opens more opportunities for businesses and individuals alike to utilize the benefits served by banks.

Benefits of Online Banking for Customers

Beyond the impact of digital banking on the general Philippine community, it offers a multitude of advantages for individual Filipinos like you. 

• Simplified Money Management: Having easy access to manage your finances through the Internet enables you to monitor your spending habits and track your transactions. Instead of manually listing down your cash flow in your budgeting diary, you can now view it through mobile banking or online banking.

• Faster Transactions: With the convenience of online banking, you can perform routine tasks like paying bills and sending money directly from your computer or mobile phone. There won’t be a need for you to individually visit the stores where your monthly statements are billed.

• Mobile Banking Integration: Most digital banking platforms integrate their services seamlessly with mobile apps, allowing you to manage your finances on the go.

• Financial Management Tools: Some banking platforms offer online budgeting tools and financial calculators as part of their functionalities. This is their way of acting as your financial advisors helping you set financial goals, track your progress, and make informed decisions.

Embracing online banking lets Filipinos enjoy a simpler, more secure, and cost-effective way to manage their finances. This can pave the way for greater financial literacy, responsible money management, and potentially a brighter financial future—positively impacting the Philippine economy as a whole.

The Social Implications of Banks

It goes without saying that financial institutions play a crucial role in society beyond simply facilitating transactions. Their practices generally have significant social implications that can influence everything from economic inequality to environmental sustainability. 

For instance, banks have the potential to foster community development by investing in local infrastructure projects, supporting businesses through loan programs, or offering affordable house options. Providing more lenient terms for businesses and individuals alike can encourage local communities to grow.

Another example would be the prioritization of banks to make sustainable investments by directing their resources towards renewable energy and environmentally conscious businesses. They can contribute to a greener future for Filipinos, focusing on environmental causes.

Lastly, banks embracing ethical practices and promoting social good can influence communities to focus on supporting charitable organizations, volunteering initiatives, and programs that can empower communities. They can even create movements that abolish poor labor practices or avoid businesses with bad environmental records.

As institutions that handle the financials of society, banks have a significant social responsibility. They can be powerful catalysts for positive change, encouraging the development of Filipino communities.

Are You Ready to Explore Digital Banking?

The Philippines is at the forefront of digital banking transformation. With new financial technologies being introduced every day, the digitization of local financial institutions is inevitable and can promote societal progress. 

At RCBC, we are proud to be innovators leading the development of FinTech in the country. RCBC’s online banking platforms and initiatives offer a secure and user-friendly banking experience, allowing Filipinos to manage their finances conveniently and efficiently.

With RCBC, you can:

• Open a new account entirely online within minutes, eliminating the need to visit a branch.

• Utilize our online platform to perform transactions with minimal effort.

• Manage your finances on the go with our mobile app.

• Perform various financial transactions like fund transfers, bill payments, prepaid load purchases, online shopping payments, and more.

• Explore RCBC’s investment opportunities directly through our platforms, allowing you to potentially grow your wealth and achieve your financial goals.

• Have access to our dedicated customer support team who are available 24/7 to assist you with any questions or concerns you may have regarding your online banking experience.

By choosing RCBC for your banking needs, you’re not just partnering with a convenient banking solution but also an organization that prioritizes innovation and security. Our aim is to provide services that empower each Filipino to achieve financial success.

Contact us today to learn more about how RCBC can add value to your financial goals!