Three local units of international banking groups made it to the The Asian Banker’s (TAB) inaugural Global Top 100 Digital Banks ranking list based on financial technology and retail operations.
TABInsights, the research arm of the Singapore-based TAB, placed the local subsidiary of Malaysia-based CIMB Group at 57th, The Netherland’s ING Bank at 67th, and Singapore-based Tonik Financial at 94th.
CIMB and ING Bank launched their digital banking business in the Philippines in 2018, while Tonik Digital Bank Inc. started operations in 2021.
Globally, the top three “digital bank-only” offerings were WeBank in China, Ally Bank in the United States and ING Bank Global.
According to TABInsights, only 29 of the 100 digital banks were recorded as being profitable.
Altogether, the 100 banks represented an aggregate $2 trillion in assets and gross annual revenues of $51 billion in 2021.
In comparison, the world’s 100 biggest traditional commercial banks have combined assets of $114 trillion, and annual gross revenue of more than $51 billion.
Spread across 36 countries, these most-profitable digital-only banks—also known as virtual, neo or challenger banks—operate independently of traditional commercial banks and offer a unique virtual customer experience.
In ranking these banks, TABInsights used a scorecard assessment that covers capabilities mapped across five key areas.
These are customer experience (weighing 30 percent of total ranking), market/product coverage (10 percent), profitability (30 percent), asset and deposit growth (20 percent), and funding (10 percent).
In the Philippines, CIMB scored a total of 19 points out of 100 points; ING Bank got 16.3 points, and Tonik got 10.1 points. The top bank, China-based WeBank, earned 63.1 points.
The three Philippine-based digital banks scored zero points in the sub-criteria of “return on equity.” This means the three banks chalked up negative ROE.
“Scale and size are not the main determinant [in ranking], and are balanced with profitability, operational efficiencies, the ability to raise funds,” TABInsights said.