Progressive Rural Bank Inc. (PRBI) has recently partnered with South Korea’s Bankware Asia and its local distributor, Ascend Data Management Inc. in a groundbreaking step towards modernizing rural banking in the Philippines.
Photo shows (from left): Wilson Go-Bankware Asia, Country Head-Philippines; Allyxon T. Cua- Ascend Data Management Inc., Chairman; Roel H. Mercado- Progressive Rural Bank Inc., President; Leody Macasaet-Progressive Rural Bank Inc., Treasurer, during the BADA Cloud service agreement-signing in Lipa.
This collaboration, which was formalized earlier in October through the signing of the BADA Cloud Service Agreement in Lipa City, Batangas, underscores the sector’s commitment to innovation and financial inclusion.
Challenges and consolidation
Rural banks are a cornerstone of economic growth in the Philippines, particularly in underserved communities. These institutions play a crucial role in fostering financial stability and inclusive development across the countryside.
However, the sector has faced mounting challenges of late, including closures, increased regulatory requirements, and the pressure to modernize in a rapidly digitalizing world.
The Bangko Sentral ng Pilipinas (BSP) has been at the forefront of addressing these challenges, with its Rural Bank Strengthening Program (RBSP) aiming to enhance the resilience, operational capacity, and competitiveness of rural banks.
Key initiatives under this program include raising the minimum capital requirements — up to ₱200 million for those with larger branch networks — and encouraging mergers to strengthen financial stability and consolidate resources.
This year, several significant mergers have taken place:
- Camalig Bank Inc. absorbed the Municipal Rural Bank of Nabua (Camarines Sur) Inc.
- Bayanihan Bank Inc. merged with the Rural Bank of Pozorrubio.
- A tripartite merger brought together Bangko Kabayan Inc., First Agro-Industrial Rural Bank Inc., and Progressive Bank Inc.
More rural banks in the Philippines are now consolidating their operations in response to the Bangko Sentral ng Pilipinas (BSP)’s efforts to enhance the risk management of small banks and strengthen the financial health of the sector.
These consolidations highlight the sector’s adaptability in overcoming the challenges and adhering to the BSP’s evolving regulatory framework.
The role of BADA Cloud in driving innovation
The partnership between PRBI, Bankware Asia, and Ascend aims to address these challenges head-on through technological innovation. The BADA Cloud Service Agreement introduces a core banking Software-as-a-Service (SaaS) solution specifically designed for scalability, security, and compliance.
By adopting this solution, PRBI can now streamline its operations, enhance accessibility, and deliver seamless banking experiences to its customers.
PRBI President Roel H. Mercado emphasized the transformative potential of the partnership. “Our collaboration with Bankware Asia and Ascend strengthens our mission to empower communities through reliable and impactful banking services. This partnership allows us to bring financial progress to more clients, aligning with our vision of being a ‘Kabalikat sa Progreso’ (Partner in Progress),” he said in a press release.
Supporting financial inclusion through technology
As of 2022, 379 rural banks were operating across the Philippines, with 2,924 regular branches and 865 ATMs. The BSP recognizes the need for these institutions to adapt to the increasing demand for digital financial services.
Partnerships like this align with the BSP’s vision of reinforcing the sector’s resiliency while ensuring that financial inclusion remains a priority.
Wilson Go, Country Head for Bankware Asia in the Philippines, expressed enthusiasm for the initiative, stating, “We are excited to support Progressive Rural Bank’s digital transformation journey. This collaboration reflects our shared commitment to advancing financial inclusion in the Philippines, leveraging core banking solutions to deliver better experiences for those we serve.”
Allyxon T. Cua, Chairman of Ascend Data Management Inc., echoed this sentiment, saying, “This partnership underscores our dedication to empowering banks and fintechs across the Philippines. Together, we aim to enhance banking experiences and drive innovation in the region.”
Rural banks: A resilient and inclusive sector
As the rural banking sector modernizes, its potential to contribute to economic growth and financial stability grows. The BSP’s initiatives, coupled with forward-thinking partnerships like that of PRBI, Bankware Asia, and Ascend, highlight a path toward a more inclusive and resilient banking ecosystem.
With digital transformation at the forefront, rural banks are now better positioned to meet the needs of their clients while navigating the challenges of an evolving financial landscape. As technology bridges gaps in accessibility, the sector’s ability to foster inclusive growth will only strengthen.
For more information about the organizations involved, visit:
- Bankware Asia: bankware.asia
- Ascend Data Management Inc.: ascend.com.ph
- Progressive Rural Bank Inc.: progressivebank.ph
This partnership signals a promising future for rural banking in the Philippines, advancing financial inclusion and innovation where it matters most.