Globe Telecom is a leading mobile network operator in the Philippines and is working with CGAP to create ecosystems or mini-economies with multiple locations for people to transact with GCASH, their mobile banking service, via SMS messaging. Rizza Maniego-Eala, President of G-Xchange, Inc, Globe’s wholly-owned subsidiary running its m-commerce business with its flagship service, GCASH, explains Globe’s strategy to expand financial services using mobile phones.

Our CGAP partnership, together with all the programs we have implemented over the past five years, has given us a much deeper understanding of how our customers use the service and how else we can improve our business model to further open possibilities for GCASH. GXI (Globe’s wholly-owned mobile-commerce subsidiary) explored different options to lay the ground work to further build out our national strategy moving forward.

There are two basic elements of our strategy.

The first element in our strategy is to offer not only a mobile wallet but participate in full banking services in partnership with a new bank. As we have reported, Globe recently purchased a 40 percent stake in a savings bank in partnership with our sister company, Bank of the Philippine Islands (BPI) which retained a similar 40 percent stake. The remaining 20 percent was purchased by our common major shareholder, Ayala Corporation. The bank’s new name, BPI-Globe BanKO Savings Bank, was recently approved by the central bank.

The ultimate thrust of this investment is to find new products that link mobile with microfinance activities that could help propagate financial inclusion to more than half the Philippine population still unable to have access to various financial services. We want to extend our understanding of both banked and unbanked customer needs with the intent of coming up with more innovations that may be shared with all our rural bank / MFI partners over the medium-term.

For example, we are looking to understand how to develop credit scores using GCASH and other mobile data points to deliver loans remotely. We don’t know what this score will look like and how we will go about testing it (we intend to work closely with CGAP). We hope to test this within our current customer base. If we come up with a solution, we would like to use the insight to develop tools for rural banks and other MF providers in the country.

Second element in our strategy: offer a larger network of cash-in and cash-out points that will benefit not only remittances but other financial transactions that GCash offers today such as access to deposits and withdrawals, salary and fund disbursements, donation, online purchases and bills payment facilitated simply by text messaging. One of the challenges we experienced at the provincial level was being able to further grow the merchant partner ecosystem. There needs to be more cash-in and cash-out points closer to the areas where potential users live or earn a living.

We tried to find a solution to this constraint, and currently, GXI is in the final stages of getting the central bank’s (Bangko Sentral ng Pilipinas - BSP) approval to enable all of Globe’s 15,000 load sub-distributors nationwide to form part of GCash’s cash-in and cash-out network with GXI being fully responsible for this network’s KYC and AML compliance. The addition of these 15,000 sub-distributor outlets, together with GCash’s existing 3,000 cash-in and cash-out points will significantly increase touch points to our customers. With the success of our partnership with CGAP in propagating GCash in the low-income areas of Bohol, Surigao del Norte and Palawan, we are now in the process of working more closely together to see what further progress we can take on with BanKO, given our 40 percent stake in this savings bank.

-Rizza Maniego-Eala