Title

BPI Globe BanKO: Reshaping the Philippines Rural Banking System

Publication Type

Case

Year Completed

1-2016

Abstract

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.

Keyword(s)

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

Discipline

Asian Studies | Finance and Financial Management | Strategic Management Policy | Technology and Innovation

Data Source

Field Research

Industry

Banking

Geographic Coverage

Philippines

Temporal Coverage

2014

Education Level

Executive Education; Postgraduate; Undergraduate

Publisher

Singapore Management University

Case ID

SMU-16-0010

Comments

SMU Faculty/Staff can download the case & teaching note with your SMU login ID & Password via the following links:

For purchase of the case and supplementary materials via The Asia Learning Exchange (ALEx), please access the following links:

For purchase of the case and supplementary materials via The Case Center, please access the following links: