A Position Paper on Digital Banking

By Axl Fitzgerald L. Bulawan

Over the years, we have seen the rise of a plethora of digital banking services. Pay Pal, companies
like Globe Telecom with GCash, and even Apple, Inc. had recently unveiled their cashless payment
system with Apple Pay. And as a lover of all things technology and seamless innovations, I am in favor of
slowly transitioning ourselves to digital banking as it encourages financial inclusion, provides more
control and convenience to consumers, and believe it or not - security.

On 2017, the Bangko Sentral ng Pilipinas (BSP) reported that, in the Philippines, only 31% of
adults have an account at a formal financial institution. 1 This is a high rate of financial exclusion which
tend individuals and families to rely on informal loans from money lenders, difficulty money remittance,
and ineffective management of paying bills.

Llanto, Rosellon, and Ortiz (2018) have observed that digital technology applied to banking and
financial transactions, or e-finance in general, has made financial services more widely available and
affordable to millions of poor customers. 2 Inclusive finance will be achieved, according to their Llanto
(2017), through innovative delivery channels and use of technology to reach the financially excluded.
And digital banking is an example of that.

It should also be of note that financial inclusion through digital technology is the most
appropriate way for Filipinos seen as reports reveal that Filipinos spend the most amount of time online
with an average of 10:02 hours a day on the internet-on any device. 3
Digital banking also provides convenience to consumers by (1) not requiring physical presence in
traditional banks, (2) enabling payment of utilities online; (3) accessing account history and transactions
from anywhere; and (4) allowing you to transfer money between accounts much more quickly and check
on your available funds before spending money without having to go through queues inside banks. 4 A
study done by MasterCard reveal that six out of ten European consumers think the digitalization of
banking industry makes their lives easier and safer, pointing to comfort as the best advantage of digital
banking solutions.5

One criticism of digital banking is the issue of security, that putting financial information online
makes it less safe with the thinking of a possibility of cyber-attack or an online crackdown.

_________________
1
Report on the State of Financial Inclusion in the Philippines. Manila: Bangko Sentral ng Pilipinas, 2017.
2
Llanto, Rosellon, and Ortiz. E-Finance in the Philippines: Status and Prospects for Financial Inclusion. Quezon:
Philippine Institute for Development Studies, 2018.
3
PH Takes Top Spot as Heaviest Internet Users Worldwide - Report." CNN Philippines, February 1, 2019.
https://cnnphilippines.com/lifestyle/2019/02/01/2019-digital-hootsuite-we-are-social-internet-philippines-
facebook.html.
4
Caldwell, Miriam. "5 Reasons to Do Your Banking Online. The Balance. The Balance, February 15, 2019.
https://www.thebalance.com/three-advantages-of-online-banking-2385804.
5
Newsroom. "Mastercard Study - Comfort, the Biggest Advantage of Digital Banking Solutions." Business Review.
Business Review, July 13, 2017. http://business-review,.eubusiness/mastercard-study-comfort-the-biggest
advantage-of-digital-banking-solutions-1431 17.
 However, it can be argued that it's actually quite the opposite. The same study done by
MasterCard, in fact, stares that digital banking consumers feel that security is one of the advantages of
digital banking.

Although it can be unsettling to hear or read about news stories on security breaches of banks
especially online ones-financial institutions employ, as they're highly regulated, use breakthrough
technologies and advanced mechanisms to guarantee rock-solid security to consumers. 6 That said, online
banking is safe with the proper precautions.

Whether we would want it or not, the advancement of digital technologies in banking inevitable.
Automation of financial transactions is not a future thing; it's an ongoing reality. This is seen as a
consequence, economists say, of the post-industrial revolution of our highly evolving society. The BSP is
using this to its advantage by harnessing digital innovations in the advancement of its goals, maintaining
that we should be at the forefront of innovation and not laggards in this field.

At the forefront of digital advancement if digital banking. Digital banking should be viewed as a
great advantage as, again, it promotes financial inclusivity, convenience, and security. At every cusp of
innovation and invention, there's will always be conservative doubts, but, ultimately, what will inevitably
prevail with the spread of digital banking is a society that's more advanced and increasingly effective than
ever.

________________
6“
How Safe Are Digital and Mobile Banking?- Expat Guide to the United Kingdom." Expatica, June 19, 2019.
https://www.expatica.com/uk/finance/banking/how-safe-are-digital-and-mobile-banking-2 143987/.
Legend:
Introduction

Argumentative Thesis Statement

Arguments

Summary of Counterclaims

Conclusion

PS. Numbers seen (1,2,3,4,5,6) in the paper are called Footnotes , Footnotes are notes placed at the
bottom of a page. They cite references or comment on a designated part of the text above it. For
example, say you want to add an interesting comment to a sentence you have written, but the
comment is not directly related to the argument of your paragraph. In this case, you could add the
symbol for a footnote (www.plagiarism.org/article/what-are-footnotes)