Update: Digital Bank Tonik Acquires License to Operate in the Philippines

Singapore-headquartered neobank Tonik Financial Pte. Ltd. has reportedly been awarded an operational license from the Bangko Sentral ng Pilipinas (BSP), in order to offer financial services in the Philippines.

The license will allow Tonik, via its local division Tonik Digital Bank Inc., to offer a comprehensive range of retail banking services, which will mainly be focused on retail deposits and issuing consumer loans. Tonik is notably the first all-digital (branchless) bank licensed platform in the Philippines, and will begin operating this year.

Tonik’s management noted that the Philippine banking industry is well-prepared for digital disruption, and will be following in the footsteps of other major international markets, where neobanks have managed to attract millions of clients and have also secured more than $5 billion in funding in the past couple years.

The Philippines currently has a $140 billion retail deposit market, and also a $100 billion unsecured consumer lending opportunity.  Filipino customers with an average age of 24 are reportedly the world’s leading market when it comes to daily internet and social media consumption. But more than 70% of the country’s adult population is still unbanked, and research shows that more than 50% of existing bank customers would be willing to switch their deposits to an all-digital bank.

Tonik is managed by its CEO and founder Greg Krasnov, who has established four major Fintech firms in the Asian consumer finance industry. Krasnov also managed to build and successfully exit a large consumer finance bank in Europe.

Krasnov remarked:

“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, and thus generating outstanding returns on assets and equity.”  

He added:

“We are honored to have been chosen by the regulator as a test partner in bringing these global best practices to the Philippines through the first digital-only bank license in the Philippines and indeed Southeast Asia.”  

Chuchi G. Fonacier, deputy governor in charge of Financial Supervision Sector at Bangko Sentral ng Pilipinas, noted:

“Aligned with the BSP Governor’s drive of bringing the central bank closer to the Filipinos, we have consciously worked on ensuring that we maintain an enabling regulatory environment for responsible new financial system players.”

Fonacier also mentioned:

“We have always welcomed players who offer reliable and inclusive financial services through innovative solutions. Thus, it is with great optimism that we welcome TONIK Bank in the Philippines and we look forward to exciting digitally-centered products and services and committed efficiencies that will benefit every Filipino.”

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