Philippine banks and insurers called to pursue human-centred AI adoption

AI adoption should be centered on financial inclusion, customer experience, and personalisation.

Philippine banks and insurers must not lose sight of the human side of their businesses as they digitise, especially in adopting artificial intelligence (AI), market experts and senior financial executives told morning attendees of the Asian Banking & Finance and Insurance Asia Summit 2025 - Manila.

Central banker Melchor Plabasan kicked off the summit with a discussion of the state of AI regulation in the Philippines.

The Bangko Sentral ng Pilipinas (BSP) is currently gearing up to roll-out a regulation that will cover untouched areas in AI regulation. These include ethical use, managing bias, and improving its accuracy, said Plabasan, who is senior director for the BSP’s Technology Risk and Innovation Supervision Department (TRISD).

“Based on the results of our thematic review, the financial sector is generally ready when it comes to joining the AI revolution, when it comes to equipping themselves with the right risk management tools,” Plabasan told attendees at the Makati Shangri-La Hotel in Manila, 11 March.

Even before the roll-out of the regulation, the Philippines already had five regulations and roadmaps and not less than eight house bills that relate to responsible AI use.

UnionBank of the Philippines’s (UBP) Chief Transformation Officer Dennis Omila followed with a fireside chat, where he discussed their digital transformation journey and their AI adoption process.

Omila highlighted the importance of having a platform to explore AI use cases before it is rolled out at large.

“If you have a platform, you can keep experimenting and not worry about whether this experiment will fly. It will be good to create those platforms, you can experiment in a cost effective or faster way,” Omila said.

Having the right strategic direction in exploring AI is also a must, which involves navigating changing regulatory priorities, said Christian Lauron, Financial Services Leader and Partner, SGV & Co. (EY Philippines).

“I had a few conversations with some of the strategists and corporate planners. And we have come to the conclusion that there has to be some agility embedded in the planning process,” Lauron said.

One of the most important applications of AI is on reimagining customer experience management, said Clement Quek, APAC Digital Strategist, Adobe.

Customers now expect companies to come at them proactively with personalized suggestions, Quek said.

“[Financial institutions] recognize that there is an opportunity to serve their customers better with personalised services, to improve their financial health and well-being,” he said.

Financial inclusion
Financial inclusion has grown but remains a challenge for Filipinos. Most locals remain underinsured, and the share of mobile penetration is still higher than the share of those who are banked, according to Sari Mortel, Head of payments for Philippines in J.P. Morgan; and Noel Tordesillas, Head of e-channel, business channels, Etiqa, both speaking at the summit’s first panel discussion. This shows massive potential for growth in both the banking and insurance sectors, they said.

But don’t think digital will be the end-all answer.

“At the end of the day, digital technology is not the end all and be all, it’s just the enabler. Digital will not solve the problem,” said Lito Villanueva, Executive Vice President, Chief Innovation & Inclusion Officer, Digital Enterprise & Innovations Group Head, RCBC, who joined Mortel and Tordesillas in the same panel.

RCBC, for example, has the First Kapitbahay ATM. Under this, the bank engaged with sari-sari stores and small businesses to reach rural areas.

Having better infrastructure in the rural areas will make the difference not just in financial inclusion but education, said Dr. Adrienne Heinrich, AI Center of Excellence Head, UnionBank of the Philippines.

This is where partnerships can make a big difference, with Heinrich noting the unique culture of SMEs in the Philippines offering “specialized” solutions to different groups of customers.

For their part, UBP has an API marketplace that enables financial technology (fintech) companies and other businesses to integrate banking platforms in the Philippines.

Digital banks' success
Digital banking leaders also discussed strategies to achieve success in a highly-saturated banking market.

“The key thing to identify is really ‘what is the data strategy?’ It really starts and ends with data,” said Angelo Madrid, President, Maya.

GoTyme Bank’s co-CEO Albert Tinio, meanwhile, highlighted leveraging an ecosystem. GoTyme, for example, leveraged the grocery and retail stores of Robinsons, with customers able to do over-the-counter withdrawals and deposits in these stores.

“We feel that because it is a trust game, the biggest part of trust is not leaving it to digital,” Tinio said. Its kiosks, for example, are accompanied by an agent.

Customisation is one means to increase trust from customers. “Trust level rises over time as I feel that the products offered to me are prioritised for me,” said Kalidas Ghose, Chairman, UNO Digital Bank.

He added that in a highly competitive market, differentiation through innovation will be key for digital banks to stand-out.

Mila Bedrenets, Chief Growth Hacker for Tonik, noted that the trust issue doesn’t extend from customers to digital banks but rather vice versa, particularly when dealing with the grassroot market.

“It’s the opposite… because [the grassroot market] don’t have credit history, because they don’t have a proper ID, it’s difficult to establish who they are and if they will pay back their loan,” Bedrenets said.

Well-being and security
Apart from digital initiatives, banks and insurers should also look into the welfare of their customers and employees.

In her keynote speech, Boston Consulting Group (BCG) Principal Sitti Reyes explored Filipinos’ financial priorities.

A BCG study found that Filipinos dream of financial security the most— with a particular focus on being able to address health scares. Affording their dream home, being able to pay for their debts, and having the ability to travel more frequently, are secondary priorities, she said.

This is reflected in where they expect to spend more in the coming year. Most don’t plan to increase their spending on loans, whether housing, car, or personal loans. In contrast, interest for investments are on the rise, Reyes said.

Meanwhile, FWD Insurance Philippines’ Chief People & Culture Officer Vita Guillen shared their employee support programs, such as a specialized app for personal and crisis support.

Guillen also shared that they offer development and support programs, and even tuition support for employees seeking to further their education.

Better security is another area of interest for financial institutions, and a new form of authentication tied to mobile operators could be the future, said Marlon Cruz, Senior Director, Business Solutions Consulting, Globe Business.

Under the silent network authentication, the mobile network itself will authenticate a user’s transaction using the phone. This will thwart GPS manipulation as part of the authentication process is confirming the device’s specific location at the moment of purchase, Cruz said.