The Bangko Sentral ng Pilipinas (BSP) announced licenses for two digital banks on Tuesday – the other was Singapore-based UNObank.

With the award of the two licenses, which marks a further push in favor of fintech banking in Southeast Asia, the Philippines central bank has greenlighted a total of three banks for digital banking in the country. It awarded a license to state-backed Overseas Filipino Bank in March. Tonik had received its initial rural bank license from the BSP in 2019, allowing the neobank to provide retail banking services focused on retail deposits, card payments, and consumer loans. It claims its digital license is the first for any private and purely digital bank in the country. (THE FINTECH TIMES)

The licenses place the neobanks as a new category of banking – a “digital bank” offers financial products and services that are processed end-to-end through a digital platform and electronic channels with no physical branches offering financial products and services. It must also have a capitalization of at least 1 billion pesos.

The license is a shot in the arm for Tonik

“Securing a digital banking license is one of this year’s anticipated milestones for us,” said Greg Krasnov, Tonik CEO and Founder. “This will help us further strengthen our foothold in the neobanking space through accelerating the rollout of our additional lending and payment products.”

In March 2021, Tonik, the first digital-only neobank in the Philippines, raised over 1 billion pesos ($20million) in retail deposits in under 1 month in a highly successful public launch.

This was a record for a new bank launching in the Philippines.

Last month, Tonik raised $17 million in pre-Series B funding led by iGlobe Partners, a Singapore-based VC firm.

The digital bank currently offers deposit interest rates of up to 6% per annum, and unique saving features such as its Solo Stash and Group Stash products, as well as Term Deposits.

Financial inclusion and digitalization a key priority for the Philippines central bank

Philippine central bank Gov. Benjamin Diokno is committed to a goal of converting half of the country’s financial transactions to a digital mode and enabling formal financial accounts for 70% of Filipino adults by the end of his tenure in 2023.

The pandemic delivered an unexpected boost to that mission, however. According to Gov Diokno, the country will likely meet those targets by the end of 2022, sooner rather than later.

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