Newsletter 1.0 May 2, 2015

Bank Product Management May 2, 2015

Bank Product innovation getting better in SEA due to payments’ engagements with regulators

The bank product distribution landscape in SEA hasn’t really caught up with its Indian and Australasian neighbours in terms of enhancing its product distribution because of the timid persistence of banks to pursue digital distribution with the country regulators. In the Philippines, the bank products are only as good as those created and presented by bank product managers and upper management which are vetted by the central bank. Innovation is stymied because of the long process of going back and forth between the banks and the central bank because the regulators are only educated as they review and assess the new product presented to them.

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Newsletter 1.0 May 2, 2015

Case in point was the East West Bank’s Visa Travel Money card which allowed customers to have multiple currencies inside one card which they can toggle between as they travel around the world. It took almost 6 months from the time the idea was presented by the bank to the regulator amidst back and forth and by the time the product was launched, the bank missed the summer travel season which they were banking on to ride and fuel their promotions and sales.

This needs to change if the country wants more innovative bank products, we all know governments are slow to action and especially common in emerging markets such as the Philippines whose other non financial government agencies are worse on red tape and elongated illogical processes. But central banks are different and should be faster and forward thinking. Luckily, there are multinational stakeholders who have formal engagements such as Visa and MasterCard who have government relations teams who regularly engage the regulators on innovation updates based on global and regional standards and experience. There are also global non-profit agencies such as London based Oxfam whose only motive is the help typhoon and other disaster stricken communities. Recently they have teamed up with Visa and UnionBank, one of the more progressive Philippine banks, to create the Oxfam Prepaid Visa card which allows displaced people to access cash relief from their donors through Oxfam and also buy basic necessities 60 days post disaster as a means of rebuilding their livelihood from card accepting merchants.

The value for Oxfam is this is obviously a far more secure way of bringing cash to the people since prior to this they were bringing hard cash to distribute manually on the ground. We know the very high security risk this poses especially in areas local security is nowhere to be found. Another valuable asset this brings is that Oxfam will now have the transaction data through the use of the cards which allows them to analyse and make better enhancements on the way they distribute cash and tie this to their database of recipients. They can now, for example, based on where and how much they spend, decide to offer accredit more lumber and hardware merchants on specific areas or basic goods on other areas based on spend patterns.

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“We are glad to see significant progress on how the regulators assess new products. We need their help to be at par with SEA banks” - Bank Product Manager in Manila

Newsletter 1.0 May 2, 2015

*Though I am a Visa employee, my comment here is my opinion and not Visa’s”

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Nico Salanio is currently the Director of Debit and Prepaid for Visa Inc. and previously South East Asia Debit Region P roduc t Manage r fo r Mas te rCa rd Wor ldwide. You can reach h im at nsalanio@visa.com and follow him on @NicoSkySalanio on Twitter.