Virtual bank ING offers high savings interest rate of 2.5%
MANILA, Philippines – From mergers and acquisitions to commercial banking, ING Bank Manila is venturing into serving ordinary Filipinos through its first savings account offering in the country – and with an enticing interest rate, too.
ING Bank's retail banking service is fully anchored on a digital platform. No physical banks, no long queues, and no tellers. All banking transactions will be done on smartphones.
With the bank's smartphone app, customers can do away with long lines and simply take a photo of a check and deposit it at any time of the day. The app also features a 24/7 chat feature where customers can inquire about various services.
For now, one needs to transfer the funds from ING to another bank to get physical cash.
ING Philippines country manager Hans Sicat said they are the first and only bank in the country, so far, to go all out on the digital transformation.
But will Filipinos embrace ING's virtual bank?
While Filipinos lead in terms of time spent on social media, the Philippines is the only country in the Asia Pacific where majority of consumers prefer to pay bills over the counter.
A 2017 report by financial technology firm Finastra found that Filipinos are reluctant to use digital banking due to the lack of a "compelling digital user experience" which would get them to stop going to physical bank branches.
Meanwhile, the 2017 Financial Inclusion Survey of the Bangko Sentral ng Pilipinas (BSP) showed that existing and potential bank clients still doubt the security of online transactions.
The survey found that about 46% of Filipinos with bank accounts have access to the internet, but are "ambivalent" on using digital bank features.
"Nearly half of account holders who have access to the internet are ambivalent about e-payments due to issues such as hacking, personal security breaches, and unsafe access," the BSP said.
But ING Bank may have found a way to lure customers: a very high interest rate per annum.
Starting June 1 of this year, the interest rate will be at 2.5%, with no minimum amount and lock-in period. ING Bank is hoping that this will make Filipinos consider the digital shift.
This is much higher than typical banks which offer around 0.25% interest per annum.
"We want to help promote a healthy savings mindset and with our high interest rate, to help Filipinos achieve their savings goals faster," Sicat said.
As for security concerns, ING chief information officer Ben Issa said the app has various checks, which he said are more secure than the usual text message authentication.
Sicat said other services, such as mobile payments, are in the pipeline as well. – Rappler.com