No easy digibank path in PH

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In focus

• ​The Philippines wants to crack down on digital-first rural banks
• A brutal set of layoffs could be coming at HSBC
• Tech in Asia’s newsroom is hiring (humans, not bots)

Hello reader,

Sometimes, the fastest way forward isn’t the straight path but a workaround.

That’s exactly what’s been happening in the Philippines’ banking scene. When the central bank stopped issuing new digital banking licenses in August 2021, players that missed the window found another way in: acquiring rural banks.

This year, the central bank is keen to put a stop to this “shortcut.”

In February, it proposed a rule that could require rural banks to hold 1 billion pesos (US$16.7 million) in capital if more than 30% of their customers are acquired digitally, matching the rule for digital banks.

Today’s top story looks at the possible fallout, from the risk of stalling rural banks’ digital push to whether this really stops digibank hopefuls from entering through the backdoor.

Meanwhile, more banks are looking at “shortcuts” on how to operate their business. HSBC is reportedly laying off 20,000 jobs – about 10% of its global workforce – amid the firm’s faster adoption of AI.

At a time when everyone seems to want to optimize every part of their lives, most go for more AI. Here in Tech in Asia though, while we embrace the tech, we still wish more humans were part of the team. In fact, we’re hiring not just one, but two new (human) reporters. Read on to learn more.

Elyssa Lopez, journalist

Top Story

PH reins in ‘backdoor’ digital banks with proposed cap. Who pays?

Salmon Bank has a billboard along EDSA, one of the major throughfares in Metro Manila. / Photo credit: Salmon Bank

Under the Rural Banks’ Act of the Philippines, rural banks are meant to extend financing in areas where farming is the main source of livelihood. But in the past five years, a crop of digital-centric rural banks have risen, in a bid to enter the country’s digital banking scene.

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