Philippine financial institutions are grappling with several pressing issues, including the need to meet the credit demands of micro, small, and medium enterprises (MSMEs), combat AI-driven fraud, and manage environmental risks, according to experts and senior executives at the Asian Banking & Finance and Insurance Asia Summit 2025 held in Manila.
The summit’s afternoon session kicked off with Patricia Buenaventura Nichol, partner and office head at Bain & Company, addressing the future of wealth management. She highlighted the paradoxes in the retail and mass affluent segments, where customers often distrust relationship managers (RMs) despite seeking human support during their financial journeys. Nichol emphasized that these customers are both overrepresented and underserved, with a lack of differentiation among wealth management players.
She suggested that while generative artificial intelligence (AI) could address some of these challenges, traditional AI solutions will remain crucial and work complementarily with newer technologies.
Revamping Customer Engagement
Kate Driz, Chief Operating Officer at AXA Philippines, then discussed the company’s overhaul of the Emma by AXA app, designed to enhance customer engagement and transform AXA’s role from just a payer to a true partner in customers’ health and financial journeys. “This was our chance to ramp up our digital capabilities,” Driz said, underscoring the significance of digital transformation in the industry.
MSME Credit Access: Bridging the Gap
A significant focus of the summit was on the barriers faced by MSMEs in accessing credit. According to Fei Yong, Manager at YCP, nearly 79% of MSMEs struggle with financing due to insufficient credit records and limited financial documentation, which banks view as high-risk factors.
Yong pointed to Bank Rakyat Indonesia’s model, where MSMEs make up 82% of the total loan portfolio with a default rate of just 2.78%. This demonstrated that financing MSMEs can be highly lucrative, she noted.
To bridge the financing gap, Yong proposed three solutions: implementing a credit guarantee scheme, where corporations cover part of the loan for MSMEs lacking collateral; promoting digital lending platforms with less stringent documentation requirements; and encouraging partnerships between banks and fintech firms, like Citigroup’s collaboration with Numerated to refine credit risk models and accelerate loan processes.
AI Fraud and Cybersecurity
As AI technology advances, so too do the threats associated with it, including the rise of deep fakes in videos and audio. Marlon Sorongon, Chief Information Security Officer at Maybank, noted that verifying authenticity is increasingly difficult, highlighting the need for robust cybersecurity measures.
Roland V. Oscuro, Chief Information Security Officer at Philippine National Bank (PNB), echoed this sentiment, emphasizing the necessity of investing in AI-driven solutions to counter AI threats. “Yes, you trust, but you also verify,” he said.
Other experts, including Rosanna Canlas from Allianz PNB Life and Carlos Tengkiat of RCBC, stressed the importance of employee and customer awareness programs to mitigate these risks. Tengkiat noted that while AI can enhance productivity, it could also lead to negative consequences if misused, particularly with the ease of accessing sensitive information.
Reinventing Bank Branches
While the COVID-19 pandemic spurred predictions that bank branches might become obsolete, Maria Cristina L. Go, EVP and Head of Consumer Banking at the Bank of the Philippine Islands (BPI), presented a different perspective. BPI is currently in the midst of a three-year transformation process that redefines customer service in branches. Go shared that BPI has introduced “customer delight officers” to address pain points and improve service, including a rapid queuing system and a platform to help branch staff offer personalized campaigns to customers.
Tackling Environmental Risks
Experts also discussed how banks and insurers in the Philippines are addressing environmental risks, particularly in the context of net-zero goals. Ria Mercado, Chief Risk Officer at Sun Life Philippines, highlighted the company’s efforts to reduce carbon operations and promote sustainable investing.
Jun Palanca, Country Manager at ING Philippines, emphasized the importance of aligning client portfolios with net-zero transition plans, noting that such practices can attract younger, environmentally-conscious talent. He pointed out that many Gen Z employees consider an institution’s stance on climate change when choosing an employer.
UnionBank of the Philippines (UBP) is also addressing climate risk through innovative financial products. According to Chief Risk Officer Erwin Wiriadi, integrating climate risk into banking operations remains a challenge, requiring upgraded tools and personnel. UBP has partnered with the Department of Education and various government agencies to offer loans to teachers and federal employees. The bank has also collaborated with the International Finance Corporation to issue social bonds directed at the MSME sector, which remains highly vulnerable to climate change.
In conclusion, as Philippine banks and insurers navigate these complex challenges, from MSME credit access to AI fraud and climate risk, their adaptability and collaboration with fintech and digital platforms will play a crucial role in shaping the future of the industry.
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