EAST WEST Banking Corp. (EastWest Bank) plans to gradually increase its spending on technology next year to expand its online capabilities and improve its services.
“We’re getting more and more aggressive on our tech spending… We need to get investment in terms of people, but also for us to then apply the things that we’re learning into the infrastructure, the ecosystem that we have. So, we’ll continue to invest,” EastWest Bank Chief Executive Officer Jerry G. Ngo told BusinessWorld on the sidelines of an event late on Tuesday.
He said tech investments currently make up about 9-10% of EastWest Bank’s total expenses, which he noted is lower than others in the industry as they want to keep their spending sustainable.
“There are some banks who are spending more, but it’s not about just the amount of money that you’re going to spend — it should be about how you architect your technology. How do you ensure that you’re not overspending every time? It’s easy to spend but the most important thing is to sustain them at the right appropriate level, and then you’re making sure that you’re deliberate in what you’re trying to achieve.”
These investments are expected to improve the bank’s cost-to-income ratio in the long term, he said.
“I think it will have to be gradually higher and higher as we go along. But we will also find performance and efficiency gains from others, and then what we’re going to hope to do is to increase transaction volume so that unit cost comes down, so we benefit. Our people are upgrading themselves in terms of capability, so our systems become bigger in capability. Our clients benefit from efficiency as well as bigger, better features. But from economies of scale, our unit cost comes down. So, the volume keeps coming in and then hopefully we can pass also the cost, and so on,” he said.
For next year, Mr. Ngo said the bank is also preparing to be one of the first banks to be able to offer Apple Pay once it enters the Philippine market following its recent integration of Google Pay through Google Wallet.
“What we are doing right now is to encourage our clients to make us the card on file. Because at some point, you will see that a lot of the digital payments will go through this,” he said.
However, near-field communication (NFC) payments could still take some time to gain traction, Mr. Ngo said.
“The only challenge with NFC is normally, this will not be very big amounts in the first instances. People will probably start with small amounts first, and we’re trying to encourage that also. But what we hope is that it will be sticky. We want you to use us for many different things — for your wallet, for your payments, for your investments, for everything. So, that’s what we’re hoping for — it’s to deepen that relationship.”
The bank will also be slowly rolling virtual equivalents for its existing cards to let clients increase or reduce limits for each card online, as well as having the transactions on the app to deter scam attempts.
EastWest Bank will also launch a wallet for its debit cards where clients can operate their investment accounts. It will also roll out a vault unlock program by the end of this year where clients can allocate an amount to a physical vault that cannot be accessed digitally.
FOODPANDA CREDIT CARDMeanwhile, as part of its push to continue growing its consumer segment, EastWest Bank on Wednesday partnered with Foodpanda to launch a cobranded credit card to tap the food delivery platform’s customer base.
“We are very excited to launch the EastWest Foodpanda Visa Credit Card. We’re positioning it as the ultimate foodie card. It’s something that can give people one of the highest, if not the highest, cashback programs,” Mr. Ngo said.
The bank plans to make the card’s cashback features available for dine-out through Foodpanda’s partner merchants, he added.
The EastWest Foodpanda Visa Card offers up to 10% cashback on orders worth up to P4,000 or cashback worth P400, after which orders will continue to earn 3%. It also gives 1% cashback on all international spend and 0.3% on local transactions.
The card has a total monthly cashback of P1,000 to be credited weekly to the user’s pandapay wallet. The annual fee is also waived for every new cardholder in the first year.
EastWest Bank’s net income climbed by 14% year on year to P6.6 billion in the first nine months on higher revenues from its core businesses.
Its shares slipped by two centavos or 0.17% to close at P11.52 each on Wednesday. — Aaron Michael C. Sy
