Digital banking’s next test: Resilience, trust and deeper credit access
Digital payments have moved from being a matter of convenience to becoming part of the Philippines’ critical economic infrastructure, raising the stakes for banks, fintech firms and regulators to keep transactions running, protect users from fraud and turn digital access into broader financial participation.
Digital banking is facing a critical test in the Philippines, with the need for resilience, trust, and deeper credit access taking center stage. As digital payments become an integral part of the country's economy, financial institutions are under pressure to maintain system availability, protect users from fraud, and expand digital financial participation.
HSBC Philippines' president and CEO, Sandeep Uppal, highlights the significance of payments in today's environment, emphasizing the need for 99.99 percent system availability. The bank has expanded its InstaPay capacity sevenfold, capable of processing up to 125,000 transactions per hour.
While the foundation for digital finance in the Philippines has been built, the real opportunity lies in leveraging this access to foster deeper financial participation. This includes expanding deposit-taking, savings, responsible credit, working capital for small businesses, and overall financial resilience. Credit access remains a challenge, with many Filipinos and MSMEs struggling to obtain formal credit due to fragmented financial information.
Open finance could bridge this gap by allowing customers, with their consent, to share verified records across institutions, such as employment history, government contributions, and business information, to support credit applications.
As the broader economy navigates a period of weaker domestic demand, HSBC's Asia economist, Frederic Neumann, anticipates a temporary slowdown in economic growth, with household consumption growth and bank lending expected to soften. However, HSBC remains optimistic about a rebound in growth next year. To support both household activity and small businesses, better access to responsible financing is crucial.
The country has the demand for credit, but the challenge lies in making smaller borrowers commercially viable. This requires better data, risk-based underwriting, and regulations that enable responsible pricing and sustainable business models.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
