BPI Globe BanKO: Reshaping the Philippines rural banking system

This case is set in December 2014, and discusses the business model and challenges facing BPI Globe BanKO (“BanKO”). Established in 2009, BanKO is the Philippine’s first mobile phone-based, microfinance-focused savings bank. At that time, statistics showed that eight out of ten Filipinos did not hav...

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Main Authors: WILLIAMSON, Peter, JOSHI, Havovi
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Language:English
Published: Institutional Knowledge at Singapore Management University 2016
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Online Access:https://ink.library.smu.edu.sg/cases_coll_all/149
https://cmp.smu.edu.sg/case/1861
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spelling sg-smu-ink.cases_coll_all-11502018-07-13T09:53:08Z BPI Globe BanKO: Reshaping the Philippines rural banking system WILLIAMSON, Peter JOSHI, Havovi This case is set in December 2014, and discusses the business model and challenges facing BPI Globe BanKO (“BanKO”). Established in 2009, BanKO is the Philippine’s first mobile phone-based, microfinance-focused savings bank. At that time, statistics showed that eight out of ten Filipinos did not have access to a bank. A few informal moneylenders provided some 40% of small-scale business lending in the market, at interest rates that could touch around 240% per annum. The population living in 40% of the Philippines’ municipalities did not have easy access to a physical bank branch. BanKO intends to address these issues by leveraging its combined assets in banking and telecommunications through a partnership between the Bank of the Philippines Island (BPI), the oldest operating bank in Southeast Asia; Globe Telecom, a leading telecommunications company; and the Ayala Corporation, one of the largest conglomerates in the Philippines. BanKO aims to provide the delivery of a range of banking services through mobile solutions supported by a network of partner outlets. These outlets are existing establishments in the community, such as pawnshops and grocery retailers, which have been selected, trained and accredited to conduct customer identification for new account applications, and perform cash-in and cash-out transactions. They are the critical link to bringing financial services to communities located even in remote locations. BanKO also offers loans to microfinance institutions, including rural banks and cooperatives. As it expanded its product range and customer base, BanKO began to extend its ecosystem to involve a range of other partners including fast moving consumer group (FMCG) companies such as Nestle, Proctor & Gamble and Unilever, “sari-sari” stores, social media providers such as Facebook, local governments, cooperatives and aid agencies. While BanKO’s performance has been encouraging, the team has yet to firmly establish that its platform and business model are indeed viable and sustainable over the long-term. In addition, it needs to be ascertained how the business could be further expanded, while ensuring that the ecosystem does not become too unwieldy to manage. Through this case, participants will have an opportunity to understand the concept of ‘ecosystem advantage’, and how firms, such as Ayala, can leverage ecosystems – both internal and external (that is partnerships with outlets and cooperatives) to deliver complex solutions, while maintaining corporate focus. This case would also be useful in illustrating disruptive innovation, as the BanKO business model has a number of elements that could potentially disrupt the traditional banking system. In addition, the case can be used to describe how social innovation, in terms of ‘banking the unbanked’ can take place. 2016-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/cases_coll_all/149 https://cmp.smu.edu.sg/case/1861 Case Collection eng Institutional Knowledge at Singapore Management University Business Model mobile-banking banking micro-finance FinTech financial technology inclusive finance bottom of the pyramid finance financial services un-banked under-banked inclusivity ecosystems disruption innovation disruptive innovation social innovation telecoms banking services mobile apps small-scale business lending telecommunications Philippines banking Asian Studies Finance and Financial Management Strategic Management Policy Technology and Innovation
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Business Model
mobile-banking
banking
micro-finance
FinTech
financial technology
inclusive finance
bottom of the pyramid
finance
financial services
un-banked
under-banked
inclusivity
ecosystems
disruption
innovation
disruptive innovation
social innovation
telecoms
banking services
mobile apps
small-scale business lending
telecommunications
Philippines
banking
Asian Studies
Finance and Financial Management
Strategic Management Policy
Technology and Innovation
spellingShingle Business Model
mobile-banking
banking
micro-finance
FinTech
financial technology
inclusive finance
bottom of the pyramid
finance
financial services
un-banked
under-banked
inclusivity
ecosystems
disruption
innovation
disruptive innovation
social innovation
telecoms
banking services
mobile apps
small-scale business lending
telecommunications
Philippines
banking
Asian Studies
Finance and Financial Management
Strategic Management Policy
Technology and Innovation
WILLIAMSON, Peter
JOSHI, Havovi
BPI Globe BanKO: Reshaping the Philippines rural banking system
description This case is set in December 2014, and discusses the business model and challenges facing BPI Globe BanKO (“BanKO”). Established in 2009, BanKO is the Philippine’s first mobile phone-based, microfinance-focused savings bank. At that time, statistics showed that eight out of ten Filipinos did not have access to a bank. A few informal moneylenders provided some 40% of small-scale business lending in the market, at interest rates that could touch around 240% per annum. The population living in 40% of the Philippines’ municipalities did not have easy access to a physical bank branch. BanKO intends to address these issues by leveraging its combined assets in banking and telecommunications through a partnership between the Bank of the Philippines Island (BPI), the oldest operating bank in Southeast Asia; Globe Telecom, a leading telecommunications company; and the Ayala Corporation, one of the largest conglomerates in the Philippines. BanKO aims to provide the delivery of a range of banking services through mobile solutions supported by a network of partner outlets. These outlets are existing establishments in the community, such as pawnshops and grocery retailers, which have been selected, trained and accredited to conduct customer identification for new account applications, and perform cash-in and cash-out transactions. They are the critical link to bringing financial services to communities located even in remote locations. BanKO also offers loans to microfinance institutions, including rural banks and cooperatives. As it expanded its product range and customer base, BanKO began to extend its ecosystem to involve a range of other partners including fast moving consumer group (FMCG) companies such as Nestle, Proctor & Gamble and Unilever, “sari-sari” stores, social media providers such as Facebook, local governments, cooperatives and aid agencies. While BanKO’s performance has been encouraging, the team has yet to firmly establish that its platform and business model are indeed viable and sustainable over the long-term. In addition, it needs to be ascertained how the business could be further expanded, while ensuring that the ecosystem does not become too unwieldy to manage. Through this case, participants will have an opportunity to understand the concept of ‘ecosystem advantage’, and how firms, such as Ayala, can leverage ecosystems – both internal and external (that is partnerships with outlets and cooperatives) to deliver complex solutions, while maintaining corporate focus. This case would also be useful in illustrating disruptive innovation, as the BanKO business model has a number of elements that could potentially disrupt the traditional banking system. In addition, the case can be used to describe how social innovation, in terms of ‘banking the unbanked’ can take place.
format text
author WILLIAMSON, Peter
JOSHI, Havovi
author_facet WILLIAMSON, Peter
JOSHI, Havovi
author_sort WILLIAMSON, Peter
title BPI Globe BanKO: Reshaping the Philippines rural banking system
title_short BPI Globe BanKO: Reshaping the Philippines rural banking system
title_full BPI Globe BanKO: Reshaping the Philippines rural banking system
title_fullStr BPI Globe BanKO: Reshaping the Philippines rural banking system
title_full_unstemmed BPI Globe BanKO: Reshaping the Philippines rural banking system
title_sort bpi globe banko: reshaping the philippines rural banking system
publisher Institutional Knowledge at Singapore Management University
publishDate 2016
url https://ink.library.smu.edu.sg/cases_coll_all/149
https://cmp.smu.edu.sg/case/1861
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