LBP MOBILE BANKING APP AND BEYOND

A Strategic Management Paper

Presented to the Faculty, Graduate School
College of the Holy Spirit Manila

In Partial Fulfilment of the requirements for

The degree of Master in Business Administration

Ebora, Divina Gracia P.

Legaspi, Olivia O.
Santiago, Gerard D.L.

2019

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 TABLE OF CONTENTS

Title Page.........................................................................................................................i

Table of Contents…………………………………………………………………..…………..ii

List of Tables.................................................................................................................vii

List of Figures................................................................................................................ix

Acknowledgement…………………………………………………………………………….x

Executive Summary......................................................................................................xii

Definition of Terms........................................................................................................xv

MODULE ONE: INTRODUCTION................................................................................1

1.1. OVERVIEW OF THE ORGANIZATION................................................................1

1.2. FOCUS OF THE STUDY.......................................................................................4

1.3. OBJECTIVE OF THE PAPER………………………………………………………..4

MODULE TWO: VISION AND MISSION.......................................................................11

2.1. VISION...............................................................................................................11

2.2. MISSION………………………………………………………………………………11

MODULE THREE: EXTERNAL ENVIRONMENT ANALYSIS.......................................13

3.1. PESTLE ANALYSIS...........................................................................................13

3.1.1 RELEVANCE OF EXTERNAL ANALYSIS TO THE STUDY................14

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 3.1.2 RELEVANCE OF EXTERNAL ANALYSIS

(GENERAL ENVIRONMENT) TO THE BUSINESS……………………..25

3.2. INDUSTRY AND COMPETITOR ANALYSIS……………………………………….32

3.2.1 MARKET SIZE/GROWTH RATE……...…………………………….……. 32

3.2.2 MARKET SHARE ANALYSIS….…….…………………………………... 34

3.2.3 MARKET ASPECTS…………….……...…………………………………. 35

3.2.4 FACTORS AFFECTING COSTS OF DOING BUSINESS……………...39

3.2.5 OPERATIONS/PRODUCTION ASPECTS.……………………………... 43

3.2.6 TECHNOLOGY DEVELOPMENTS......……...…………………………...43

3.2.7 INDUSTRY FINANCIAL ANALYSIS…...………………………………….44

3.2.8 PROBLEMS IN THE INDUSTRY……...…………………………………. 45

3.2.9 CRITICAL SUCCESS FACTORS IN THE INDUSTRY.…………….…. 48

3.2.10 PORTER’S FIVE FORCES MODEL...………………………………...... 50

3.2.11 COMPETITIVE PROFILE MATRIX …...……………………………….... 53

3.2.12 COMPETITOR ANALYSIS………..….…….…………………...………... 55

3.2.13 EXTERNAL FACTOR EVALUATION ANALYSIS ……………………... 60

3.2.14 EXTERNAL FACTOR EVALUATION MATRIX…………………………..62

3.2.15 MOBILE BANKING EVALUATION FRAMEWORK (MoBEF)…………..64

3.2.16 CUSTOMER COMPLAINT ANALYSIS……….…………………………..67

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MODULE FOUR: INTERNAL ENVIRONMENT ANALYSIS………………………………68

4.1. KEY PERFORMANCE INDICATORS..………………………………………………68

4.1.1 STRATEGY MAP………………………………………….……………….....68

4.1.2 PERFORMANCE SCOREBOARD…………………….……………....…..69

4.1.3 THREE YEAR PERFORMANCE MEASURE………….…….…………...73

4.1.4 VALUE CHAIN ANALYSIS………………………...……….………….…...78

4.2. INTERNAL FACTOR EVALUATION MATRIX……………………………………..…84

MODULE FIVE: STRATEGY FORMULATION…………………………………………….87

5.1. SWOT AND TOWS ANALYSIS……………………………………………………….87

5.2. BCG MATRIX…………………………………………………………………………..88

5.3. THE INTERNAL-EXTERNAL MATRIX……………………………………………….91

5.4. SPACE MATRIX………………………………………………………………..………93

5.5. THE GRAND STRATEGY MATRIX…………………………………………..……...95

5.6. SUMMARY OF STRATEGIC FORMULATION TOOLS ………………..…………96

5.7. THE QUANTITATIVE STRATEGY PLANNING MATRIX……………….…...……97

MODULE SIX: OBJECTIVES, STRATEGY RECOMMENDATIONS/PLANS …………100

6.1. OBJECTIVES………………………………………………………………………….100

6.1.1 STRATEGIC AND FINANCIAL OBJECTIVES………….……..…………100

6.1.1.1 STRATEGIC OBJECTIVES……………………………….………….101

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 6.1.1.2 FINANCIAL OBJECTIVES………………………………………….101

6.2. STRATEGY RECOMMENDATIONS...............................................................102

6.2.1 BUSINESS STRATEGIES…………………….………….………………102

6.2.2 ORGANIZATIONAL STRATEGIES………….………….…………….…103

6.2.2.1 MANAGEMENT………….…………………………….………….….103

6.2.2.2 MARKETING.....………….…………………………..……………….103

6.2.2.3 ACCOUNTING AND FINANCE…………………………………….104

6.2.2.4 OPERATIONS.....………….…………………………………………104

6.2.2.5 INFORMATION TECHNOLOGY……………………………………104

6.2.2.6 HUMAN RESOURCE…………..……………………………………105

6.2.2.7 RESEARCH AND DEVELOPMENT..………………………………105

6.3. ACTION PLANS…………………………………………………….……………….106

MODULE SEVEN: STRATEGY IMPLEMENTATION.................................................111

7.1 STRATEGY MAP..........................................................................................111

7.2 DEPARTMENTAL ACTIONS PLANS…………………………………………112

7.3 COST BENEFIT ANALYSIS……………………………………………………116

7.4 FINANCIAL PROJECTIONS…………………………………………………...118

7.4.1 STATEMENT OF INCOME…………………….………….……………..118

7.4.2 STATEMENT OF FINANCIAL POSITION…….………….…………….119

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 7.4.2.1 STATEMENT OF FINANCIAL HIGHLIGHTS…………………….120

MODULE EIGHT: STRATEGY EVALUATION, MONITORING AND CONTROL........121

MODULE NINE: CONCLUSION.................................................................................123

Bibliography................................................................................................................124

References………………………………………………………………………………….125

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 LIST OF TABLES

Table 1 PESTLE Analysis…………………………………………………………………........ 13

Table 2 Generation Diversity………………………………………………………………...... 14

Table 3 e-Banking Operations…………………………………………………………........... 34

Table 4 Porter’s Five Forces Model …………………………………………………………...50

Table 5 Competitive Profile Matrix…………………………………………………………… 53

Table 6 Competitor Analysis……………………………………………………………………. 55

Table 7 EFE Matrix………………………………………………………………………….……. 62

Table 8 MoBEF…………………………………………………………………………….…….64

Table 9 Socio-Economic Impact…………………………………………………………………..69

Table 10 Performance Scorecard – Financial………………………………………………...70

Table 11 Performance Scorecard – Stakeholders……………………………………………71

Table 12 Performance Scorecard – Internal Process……………………………………… 72

Table 13 Performance Scorecard – Learning and Growth………………………………… 72

Table 14 Bank Rankings as to Return on Equity……………………………………………. 76

Table 15 LANDBANK Net Income……………………………………………………………. 77

Table 16 IFE Matrix……………………………………………………………………………. 84

Table 17 SWOT and TOWS Analysis………………………………………………………... 87

Table 18 BCG Matrix…………………………………………………………………………… 89

Table 19 Space Matrix…………………………………………………………………………. 93

Table 20 Summary of Strategic Formulation Tools………………………………………… 96

Table 21 QSPM………………………………………………………………………………… 97

Table 22 Departmental Action (Strategy 1) …………………………………………………. 112

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Table 23 Departmental Action (Strategy 2)………………………………………………….. 114

Table 24 Cost Benefit Analysis (Strategy 1)………………………………………………….116

Table 25 Cost Benefit Analysis (Strategy 2)..................................................................... 117

Table 26 Statement of Income (Actual and Projected)……………………………………...118

Table 27 Statement of Financial Position (Actual and Projected)………………………….119

Table 28 Statement of Financial Highlights (Actual and Projected)……………………….. 120

Table 29 Balanced Scorecard………………………………………………………………….121

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 LIST OF FIGURES

Figure 1 LANDBANK’s Number of ATMs, CDMS, Branches, LEAF and LEAM………...2

Figure 2 LANDBANK’s Organizational Structure…………………………………………...3

Figure 3 Driver’s for Mobile Banking………………………………………………………....5

Figure 4 Transaction Cost Per Channel Usage……………………………………………..7

Figure 5 LANDBANK’s Balance Scorecard………………………………………………..12

Figure 6 Mobile Phone Usage……………………………………………………………....33

Figure 7 Ranking as to Assets………………………………………………………………57

Figure 8 Ranking as to Capital………………………………………………………………58

Figure 9 Ranking as to Return on Equity…………………………………………………..58

Figure 10 Ranking as to Loans……………………………………………………………...59

Figure 11 Ranking as to Deposits…………………………………………………………..59

Figure 12 LANDBANK Strategy Map………………………………………………………68

Figure 13 Top Ten Commercial Banks for 2016………………………………………….74

Figure 14 Top Ten Commercial Banks for 2017…………………………………………..74

Figure 15 Top Ten Commercial Banks for 2018…………………………………………..75

Figure 16 LANDBANK Value Chain………………………………………………………..78

Figure 17 LANDBANK Service Value Chain………………………………………………83

Figure 18 IE Matrix…………………………..………………………………………………91

Figure 19 SPACE Matrix Graph……………………………………………………………94

Figure 20 Grand Strategy Matrix…………………………………………………………..95

Figure 21 Strategy Map…………………………………………………………………...111

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 ACKNOWLEDGEMENT

The journey and completion of this paper would not be possible if not with the grace of

our Almighty Creator. We wish to express our high honors to Him for the blessing of

wisdom, perseverance and time to be able to accomplish and attain the expected result

of this effort.

We would also like to convey our utmost gratitude to our professors in the College of

the Holy Spirit, Manila Graduate Education Department, who generously shared their

knowledge and expertise for us to be able to discern all the topics in our MBA lessons.

We give special mention to Mr. Cabalo, for his patience, understanding and guidance

and to Mr. Sinocruz, for his concern, assistance and willingness to motivate us to

complete this paper the best way we can.

Likewise, we are deeply honored and grateful to our dear institution, LANDBANK for

giving us the opportunity to access higher education and for supporting us from

enrollment up to the little things such as providing food during our night classes.

Also, we would like to thank our colleagues and classmates for the valuable contribution

and for their help directly and indirectly to complete this paper. As we all say, “One

Class, One Goal!”.

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Finally, to our spouses, Mr. Alan Ebora, Mr. Ed Legaspi and Ms. Kris Anne Santiago for

their unwavering encouragement and support all throughout the program since

conceptualization and realization of this paper; and a special mention to our children,

Alas and Isa, Roni and Mark, and Godi, for being our inspiration to fulfil this final task in

our MBA.

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 EXECUTIVE SUMMARY

By 2020, almost 70 percent of the Philippine population is forecasted to be using mobile

phones. While about 40 percent, of the Filipino workforce are digital natives, born in the

digital era. Development in technology definitely has a big impact on the way business is

done. The traditional lines are being blurred between financial services and other

industries, all because of different factors brought about by new technologies such as

artificial intelligence, advanced analytics, block chain, and the internet. Left and right, the

banking sector is being disrupted by the burgeoning number of FINTECHS. All the while,

our local Philippine banks are mostly still not up to speed on these technological

advances. How can we use these new technologies and promote financial inclusion?

How do we encourage the banking institutions to adapt quickly to the changing times?

The Philippine Banking Industry, which comprises of LANDBANK and other top banks,

has already initiated efforts to address the abovementioned challenges. LANDBANK

adapted and accepted the challenge by applying digital, mobile and Internet banking

concepts to its various banking products. LANDBANK has mobile ATMs, mobile banking

application, mobile loan service, electronic/internet banking, electronic salary loan

service and bank phone access to process various banking transactions. However, the

number of customer complaints still increases. Based on the data on the number of

customer complaints on ATM related transactions of the bank, the number of complaints

increases by 30% yearly average. This comprises of 77 % of invalid disputes, which

includes requests for transaction inquiries and only 23% are valid complaints, which

come from validated unsuccessful transactions.

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As part of LANDBANK’s effort in strengthening its banking platforms and introducing

innovative channels to promote greater financial inclusion and banking convenience for

its clients, LANDBANK shall adopt a digital platform to accommodate and process

customer transaction inquiries and complaints.

“Our efforts are geared towards incorporating as many Filipinos as possible into the

financial mainstream through traditional and digital platforms. We continue to invest on

systems and technologies that will allow us to expand our reach, streamline processes,

and improve the delivery of our products and services,” said LANDBANK President and

CEO Cecilia C. Borromeo.

This strategic management paper entitled “"LBP Mobile Banking App and beyond" will

recommend strategies to enhance LANDBANK’s mobile banking app to address various

client's needs such as inquiries on unauthorized transactions, filing and monitoring of

complaints which are not yet available in the existing LANDBANK and other bank's

mobile banking app. This will enable LANDBANK to be in sync with it’s digital, mobile

and internet initiatives in order to (1) attain better customer service due to its

convenience and availability; (2) higher bank savings due to decrease in labor cost to

accommodate client inquiries/complaints and (3) increase bank branding due to its

innovation and strengthen bank reputation due to its reliability.

Nowadays, banks are driven to adopt new technologies to be at par or stay ahead from

their competitors and Mobile Banking is the latest electronic delivery channel since

internet has also evolved to being mobile.

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As a result of significant convenience on the part of the client, allowing them to do

banking transactions without restrictions on time and place, Mobile Banking has become

one of the best things that ever happened in banking.

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DEFINITION OF TERMS

To understand and clarify the terms used in this paper, the following are hereby defined:

Terms Definition
Debited but not successful ATM related transactions
ATM Complaints (withdrawal, Point of Sale (POS) purchases, online
purchases)
refers to an umbrella term for computer-based products
Digital Technology
and solutions
refers to the entireness of the interactions a customer
Customer Experience has with a company and its products; According to
(CX) Forrester, CX is how customers perceive their
interactions with the company
refers to a group of inter-related systems that provides
an alternative banking channel designed to provide a
eBanking Systems
convenient, reliable, and secure delivery of banking
services via the Internet
refers to a business that aims at providing financial
Financial Technology
services by making use of software and modern
(FinTech)
technology
is a free application that provides clients convenient
access to the Bank’s wide array of services through their
smartphones anytime, anywhere. A relatively new form
Mobile Banking of service where banks or financial institutions allow
Application (MBA) their customers to conduct financial transactions through
their mobile devices. Mobile banking can be carried out
in collaboration with telecom industry.

accessing with more than one banking channel. Despite

Multi-channel mobile banking rising to mass appeal, clients still prefer
combining digital and physical channels in banking
Two or more operating environments, which typically
include the CPU family and operating system. For
example, if versions of a program run on Windows and
Multiple Platforms
the Macintosh, the software is said to support multiple
platforms. That application is also known as a "cross
platform" application.
Refers to application of scientific knowledge for practical
Technology purposes especially in industry; machinery or equipment
developed from the application of scientific knowledge.
refers to a group of interconnected (via cable and/or
wireless) computers and peripherals that are capable of
Network
sharing software and hardware resources between
many users (BANCNET and VISANET)

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 MODULE ONE – INTRODUCTION

1.1 OVERVIEW OF THE ORGANIZATION

Land Bank of the Philippines (LANDBANK, LBP) was created on August 8, 1963, by

virtue of Republic Act 3844 or the Agricultural Land Reform Code, in able to finance the

acquisition and distribution of estates for division, likewise for the resale to small

landholders, also to purchase landholding by agricultural lessee.

With an authorized capitalization of 1.5 Billion Pesos, and an initial capital of 200 Million

Pesos, LBP, as a government financial institution, its social mandate is to promote

countryside development while remaining financially viable. To do this, LBP has dual

functions, deriving profits from its commercial banking operations and using it to finance

its development programs and initiatives.

This tough balancing act by LBP is being managed successfully over the years, as

evidenced by the continued expansion of its loan portfolio, with its priority sectors in

mind which are the small farmers and fisher folk, agrarian reform beneficiaries, micro

and SME’s, local government projects on agriculture and aquaculture, even

government-owned and controlled operations; communications, transportation, housing,

education, health care, environment-related projects, tourism, and utilities.

LANDBANK is an implementing agency of CARP involved in land evaluation,

compensation to owners of  private agricultural lands, and collection of amortizations

from CARP farmer-beneficiaries. It also has a Provision of credit assistance to small

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farmers and fisher folk and ARBs. At the same time, it is an official depository of

government funds. A government bank with a social mandate to spur countryside

development.

As of August 2019, LANDBANK already has 403 branches all over the Philippines, with

44 lending centers servicing its clientele and 2,099 ATMs in different strategic locations.

Today, LANDBANK is the largest formal credit institution in the rural areas by far. And in

terms of deposits, assets and loans, it ranks among the top 5 commercial banks in the

country.

Figure 1- LANDBANK’s Number of ATMs, CDMs, Branches, LEAFs and LEAMs

LANDBANK’s mobile banking system was started on 2013. The first one is the LMBS,

which is a Telco Agnostic (SMS based) is an alternative mobile banking facility which

allows clients to do balance inquiry of their active peso deposit accounts (CA/SA) and

cash card accounts via all types of mobile phones available in the market.

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While the LANDBANK MBA implemented on 2016 is a free application that provides

clients convenient access to the Bank’s wide array of services through their

smartphones anytime, anywhere.

Figure 2 – LANDBANK’s Organizational Structure

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1.2 FOCUS OF THE STUDY

As part of LANDBANK’s effort to adapt to digital technology, the focus of our study is to

exploit opportunities, concentrate on and invest in the digital strategy, which will support

the bank’s mandates such as:

1. pursuit of business

2. institutional viability; and

3. customer service

Enhancement of LANDBANK’s mobile banking application will enable the bank to be in

sync with it’s digital initiative in order to:

1. attain better customer service due to its convenience and availability;

2. increase in income and bank savings due to increase in ATM related

transactions and decrease in labor cost in accommodating client

inquiries/complaints; and

3. increase bank branding due to its innovation and strengthen bank reputation

due to its reliability.

1.3 OBJECTIVE OF THE PAPER

The objective of the paper gears towards the mprovement of customer experience

through digital banking platform.

A positive customer experience is paramount to any business, including a bank.

Ultimately, this paper hopes to improve customer experience by extending the best

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customer service particularly in addressing LBP Mobile Banking App concerns. Instant

fulfillment of customer needs is one of the primary reason people appreciate mobile

banking. Putting all services at their fingertips anywhere and anytime they want. This

instant gratification provided by mobile banking apps is what makes customers satisfied

and loyal to a financial institution.

Banking is becoming a more and more technology savvy industry largely due to mobile

technologies. According to a survey by Statista, the number of smartphone users in the

Philippines is steadily growing and is expected to pass about 40 million by 2020. The

number of people using banking apps is also progressive. So here are some factors that

determine the need for investing in a mobile app.

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 Figure 3- Drivers for Mobile Banking

While the benefits of mobile banking for consumers are clear (convenience, security,

ease of access), mobile banking also presents some distinct advantages for the banking

industry itself:

Mobile banking lowers bank’s expenses

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Mobile transactions increase a bank’s overall efficiency by:

1. Helping banks go paperless and be environmentally friendly;

2. Saving money on printing and delivery;

3. Eliminating the need to hire additional workers;

4. Offering transactions that are ten times cheaper than ATM transactions;

5. Saving on operational costs of running bank branches.

According to research by Deloitte, the cost of mobile transactions in future may become

50 times lower than branch transactions and 10 times lower than transactions via ATMs.

This offers an opportunity to lower operating costs and increase inefficiency.

Figure 4 – Transaction Cost Per Channel Usage

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Significant return on investment (ROI)

According to a study by Fiserv, mobile banking impacts customer engagement and

returns on investment in several ways. By increasing mobile banking adoption rates, the

average institution can generate millions in additional revenue and reduce attrition by up

to 15 percent.

Engaged mobile banking customers use more services

Compared to branch-only customers, mobile banking customers hold more products

from their financial institutions. This is because mobile banking customers are more

engaged with companies and services.

Mobile customers stay with financial institutions longer

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The attrition rate (or chunk rate) is the decrease in the number of customers over a

period of time. The attrition rate of mobile banking users is lower compared with branch-

only or online users.

Mobile customer’s complete transactions more frequently

Research reported by the ABA Banking Journal suggests that immediate access to a

user’s financial information can influence additional transactions. This is why users of

mobile banking services generate more average revenue than users of non-mobile

banking services. Banks generate 66 percent more revenue from users of mobile

banking services than from branch-only customers.

Improved customer experience

A positive customer experience is paramount to any business, including a bank. Here’s

how a mobile banking app can improve your customer experience:

2. 24/7 availability. With mobile banking, your customers aren’t limited by working

hours and the locations of branches or ATMs. By providing round-the-clock services,

customers can access their accounts whenever they want.

3. Instant fulfillment of customer needs. The reason people appreciate mobile

banking is that it puts all services at their fingertips. The instant gratification provided by

mobile apps is what makes customers satisfied with and loyal to a financial institution.

4. Personalization. Almost every business realizes the importance of providing a

personalized customer experience. For banks, personalization is extremely important

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for building trust with customers. By collecting data on customers’ behavior and

preferences, banks can create unique experiences for their users. This results in

customer satisfaction and increased credibility.

5. Full control over customer finances. Mobile banking helps customers keep all

finances under control so they’re able to monitor their balances, get account alerts,

transfer money instantly, check deposits, and do much more.

Better security

Security is one of the most important concerns for customers. Online and mobile

banking both bring their own risks, but additional hardware security makes mobile

banking more secure than its online counterpart.

In order to maximize security, banks use security solutions such as gesture patterns

and biometric data like fingerprint and retina scans in addition to traditional passwords

and two-factor authentication. Almost all financial institutions use encryption to protect

financial information and privacy, which guarantees worry-free mobile banking. Also,

malware is less likely to threaten an app because of the proliferation of platforms. Even

if your customer loses their cell phone, their banking data is safe.

Gathering customer analytics

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With a mobile app, you’re able to collect and analyze actionable metrics. This allows

you to measure and improve your services and customer experience. Metrics help

banks understand how users interact with an app and why. All metrics can be divided

into three major groups: consumer satisfaction and user engagement, acquisition, and

performance.

By monitoring user satisfaction and engagement, banks are able to focus on the user

experience. For example, the number of active users, session intervals, retention rate,

abandonment rate, and churn rate indicate user engagement.

Acquisition metrics help you track number of downloads and where they’re coming from.

This can help banks figure out which marketing campaigns are successful.

Finally, measuring performance is extremely important as crashes or slow loading can

impact the user experience greatly. Performance metrics help determine why a mobile

banking app might have a high churn and abandonment rate.

MODULE TWO – VISION AND MISSION

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2.1 VISION

By 2023, LANDBANK shall be the leading universal bank that promotes inclusive

growth, especially in the unbanked and underserved areas, through the delivery of

innovative financial products and services powered by digital banking platforms.

LANDBANK’s vision directly addresses the business that it was created to be. Being a

bank created by law to serve the country’s priority sectors – the unbanked and the

underserved and nevertheless, keep up to date to be able to give excellent customer

service.

2.2 MISSION

To Our Clients and Publics:

We provide accessible and best technology solutions to deliver timely and responsive

financial and support services to meet the needs of our clients, especially Small

Farmers and Fishers (SFFs), Micro, Small and Medium Enterprises (MSMEs),

Countryside Financial Institutions (CFIs), Local Government Units (LGUs) and

government agencies, while promoting sustainable development anchored on good

governance.

To Our Employees:

We are the employer of choice.  We develop and nurture talents who exemplify the

highest standards of ethics, social responsibility and service excellence.  We support

diversity and cultivate a healthy work environment with equal opportunity for

professional growth and advancement.

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LANDBANK’s mission directly gives specific orders and activities towards the realization

of its vision. It is the set of actions that LANDBANK shows its commitment to their

clients. But it does not only state activities pertaining to clients but to the public as well.

And most especially, it does not forget to give importance and consideration to its

employees.

Figure 5- LANDBANK’s Balance Scorecard

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 MODULE THREE - EXTERNAL ENVIRONMENT ANALYSIS

3.1 PESTLE ANALYSIS

Table 1 – PESTLE Analysis

PESTLE ANALYSIS
Political Economic Social Technological Legal Environment
The The It is clearly The global The banking Mobile banking also
Philippine Philippines is true that banking sector industry presents some
banking one of the customers’ is becoming follows strict distinct advantages
industry has most expectations both more laws for the banking
always dynamic towards strategically regarding industry itself:
played a economies in digital focused and anti-money
substantial Asia, with banking technologically laundering, Mobile transactions
role in GDP growth evolve. In advanced to data privacy, increase a bank’s
sustaining of 6.8% terms of respond to consumer overall efficiency
the pace of expected in digital, consumer laws, and by:
growth of the 2017 and customers expectations trade
country’s 6.9% in like to keep while trying to structures to  Helping banks
economy. 2018. Banks things simple defend market confirm go paperless and
The entire in the country and they share against frameworks be environmentally
banking are well- expect a an increasing within the friendly;
sector is established similar, array of industry.
supervised from a personalized, competitors. A Such legal  Saving money
by the liquidity omni-channel great deal of structures on printing and
Bangko standpoint experience for emphasis is are required delivery;
Sentral ng where banks handling their being placed for all banks
Pilipinas, claim a lion’s finances. on digitizing whether  Eliminating the
while the share of the Banks core business domestic or need to hire
overall total deposits therefore processes and international additional workers;
industry is available to have to reassessing operations
segmented whole deliver an organizational situated in  Offering
and banking engaging structures and the country transactions that
variegated as industry. solution internal talent e.g. RA are ten times
under Their area of similar to that to be better 8791(GBL), cheaper than ATM
Commercial services from Google, prepared for BSP Circular transactions;
and ranges from Facebook or the future of No. 1018,
Universal wholesale, Apple. These banking. This Series of Saving on
banks which retail and companies transformation 2018 operational costs of
hold around corporate are illustrates the running a bank also
90% of the banking to successful increasing has a great impact
total market treasury, because they desire to on the environment.
share of trade, focus on the become a
banking underwriting user. They ‘digital bank’
industry in and provide them
the investment with a
Philippines. advisory. superior user
The While the experience
government growth of and once the
on the other retail banking users are

Mobile Banking App and Beyond P a g e | 14

hand can income in the hooked,
intervene in Philippines is valuable
the matters expected to information
of banking slow to about can be
through its 12-13% over gathered
powers, the next few about them.
making the years, it will This
industry still be the information is
susceptible second- then carefully
to political fastest in the analyzed and
impacts of region after can be used
specific Vietnam. As to sell them
legislative a result of the the most
laws such as anticipated relevant
trade and slowdown, it products and
labor, tariffs, is services. The
and increasingly same can be
regulatory important for achieved by
laws. banks to look banks, but
for new they need to
sources of have a
income and strategy, a
control costs. journey that
can be
followed,
polished and
continuously
improved, and
it should
begin with a
customer
centric
mindset.

3.1.1 RELEVANCE OF EXTERNAL ANALYSIS TO THE STUDY

Socio-Cultural, Demographic Trends, Lifestyle Changes and Technological

Table 2- Generation Diversity

Traditionalists Baby Boomers Generation X Millennials

Birth Years Before 1945 1946 – 1964 1965 – 1980 1979 – 2006

Business
Focus Quality Long Hours Productivity Contribution

Motivator Security Money Time off Time off

Mobile Banking App and Beyond P a g e | 15

 Company
Loyalty Highest High Low Low

Status Means to an
Money is Livelihood Today’s payoff
symbol end

Family/
Value Community Success Time Individuality
Source: Lynne C. Lancaster:“When Generations Collide”

Diversity in the Workplace

A research from the Northwestern University, Illinois revealed that many countries

have introduced laws tackling age discrimination in recent years. In the UK, age

discrimination laws were passed in 2006, and since then, there have

been thousands of employment tribunal claims every year, indicating that ageism

remains a serious issue in the workplace. It’s important to understand that ageism

works both ways—it can mean discrimination against either older or younger

workers. If you’re treating people unfairly based on their age, you could fall foul of

the law. As with other types of diversity, generational diversity can help your

company perform better in many ways, such as:

Better Innovation and Problem-Solving

“Two heads are better than one.” When two people come together to solve a

problem, they can pool their experiences and ideas to devise a better solution. Not

only are there two or more heads, but those heads are also different. They've got

different ideas, different perspectives, different life experiences. People of different

ages can bring very different viewpoints, particularly in this age of rapid

technological progress. There’s a great benefit to bringing together people who

Mobile Banking App and Beyond P a g e | 16

spent most of their lives without the internet and those who’ve never known

anything else—along with people who are somewhere in the middle.

As for LANDBANK whose customers are spread across that broad age spectrum it

is an edge to have an age-diverse workforce and be able to better understand the

client’s needs and on how they should be served. It’s more effective to have

people on staff who can bring in the perspectives of different generations in the

workplace.

Provide Learning Opportunities

Job training is great, but one of the best ways of helping your employees develop

is by encouraging mentoring relationships, where one employee (usually more

experienced) provides guidance to a colleague.

People being mentored experience faster career advancement, increased

productivity, better time management, higher job satisfaction, and more. And the

mentors themselves gained greater satisfaction and developed their coaching and

management skills, among other benefits.

Having a mix of younger and older employees provides a perfect opportunity for

mentoring to take place within the organization, facilitating the flow of knowledge

and allowing people to learn and become better at their jobs.

Since the banking industry relies mainly on its manpower to operationalize,

Mobile Banking App and Beyond P a g e | 17

generation diversity should be taken into account in formulating strategies. Studies

reveal that personalities and work attitudes can be categorized according to

various generations. However, with careful planning, generation diversity could

work to the Bank’s advantage as it caters to customers of equally diversified

generation

POPULATION

Based on the latest population census of the Philippine Statistics Authority (PSA)

in 2015, the Commission on Population (PopCom) estimates that there will be

108,885,096 Filipinos by December 31, 2019.

PopCom cited PSA data showing a steady decline in the number of births among

Filipinos in 2017, while the number of senior citizens continuously increased over

the years.

PopCom said the number of senior citizens or those aged 60 and above are

expected to increase by 8.2% in 2019 from around 7.5% in 2015.

70-million PH workforce in 2019

The Philippine workforce is also expected to reach as much as 70 million this year.

By the end of 2019, PopCom said Filipinos of working age will increase by 1.4

million to 70,121,863, while those outside of the working age are expected to also

go up by 363,043 to reach 38,482,360.

Mobile Banking App and Beyond P a g e | 18

The dependency ratio – the number of dependents over the number of people of

working age – will decrease from 55.5 in 2018 to 55 in 2019. However, an “ideal”

dependency ratio is 50, as a higher ratio means a heavier burden for workers who

must earn enough to support themselves and at least one dependent.

Still, the burden rests mostly on working Filipinos, because 18% of them are either

unemployed or underemployed and single mothers “probably carry the heaviest

burden” because two-thirds of the work force are composed of males.

PopCom said "with the increasing work force, it becomes an increasing challenge

to the government to accelerate its effort to create jobs and economic

opportunities to optimize this demographic condition." "Failure to employ this

massive work force means more economic burden on the working Filipinos and on

limited government resources”.

Technological Developments

Digital technology is expanding the impact of online commerce far beyond just the

retail industry. As the lines between retail and banking blur, financial marketers

need to respond to consumers' expectations and become part of their overall

digital lifestyle.

The buying process and demands of the banking consumer are being impacted

more than ever by forces outside of financial services. While smaller financial

technology competitors are combining the power of data, analytics and digital

Mobile Banking App and Beyond P a g e | 19

technology to build more personalized experiences in banking, large non-banking

players like Amazon, Facebook, Walmart, Apple and Google are impacting every

aspect of the how a consumer manages their daily life.

As brands find new ways to engage consumers beyond traditional commerce

interactions, consumers are beginning to embrace new technologies like voice-

activated devices, purchasing from search results, and using mobile devices for all

stages of the buying process. While these new activities are initially taking hold in

the retail industry, they are impacting all industries, as consumers are becoming

educated in the benefits of a connected lifestyle.

In addition to becoming accustomed to new ways to connect through voice-

activated devices and mobile phones, the consumer is increasingly expecting

seamless interactions that result in close to immediate satisfaction. Where in the

past, consumers would be patient with the availability of products and services

they wanted, the desire for simple purchasing processes and lightning-fast delivery

is changing the business models across all industries.

The Death of Traditional Channels

Consumers value their time more than any part of their lifestyle. As a result, there

is the desire to own connected devices and engage digitally more than ever. The

impact of mass media and offline channels has decreased. Consumers are more

connected, digitally savvy and open to a sharing economy than ever before. They

Mobile Banking App and Beyond P a g e | 20

are less likely to have a traditional cable package and more likely to have a

membership in a streaming service.

Today’s consumer wants to control when and how they make purchases. The

purchase may be in a traditional branch or store during normal business hours …

or it may be by smartphone in the middle of the night.

Impact on Banking: For the banking industry, these trends increase the

importance of developing better digital channel solutions, including mobile banking

solutions with an improved user experience.

The Need for Speed

One of the biggest changes in the retail model is the shift towards online buying.

According to survey, 7% of consumers ages 18-25 shop online daily, with 6% of

consumers 26-35 doing the same. This changes the way organizations in all

industries need to support branding and search.

In addition to the channel shift for shopping and buying, consumers value speed.

They increasingly expect fast and free shipping as a standard offering. This

expectation is strongest with the younger demographic segments. According to

research, 54% of consumers under 25 years of age say same-day shipping is their

number one purchase driver followed by next-day shipping.

Mobile Banking App and Beyond P a g e | 21

Impact on Banking: While banking doesn’t ship physical products or need to deal

with free returns, the consumer expectation of immediacy goes across industry

verticals. Consumers are increasingly frustrated with ‘friction’ in a buying process.

This includes long forms, lack of transparency and the inability to complete an

entire transaction digitally.

Financial organizations will be expected to provide end-to-end account opening

capabilities without the need to visit a branch office. Very soon a significant

percentage of consumers will make purchase decisions based on this capability.

Social Media as a Purchase Channel

Social media is increasing as a commerce channel, but not all social media

channels are created equal. “More than half of consumers (54%) report using

social media as part of their purchase journey income capacity, whether it’s to

browse, research, gain inspiration or purchase,” according to the Walker Sands

report. “As consumers become more comfortable purchasing goods across

categories online, they’re also expanding the channels on which they shop and

purchase on a regular basis.”

Impact on Banking: Will consumers become comfortable shopping or buying

financial services through social media channels? This question can only be

answered through testing by banks and credit unions. Consumer behavior in every

industry is changing daily and the benefits of being a first mover have never been

greater (or shorter lived). Financial marketers should continuously test social

Mobile Banking App and Beyond P a g e | 22

media’s impact at different stages to determine the marketing ROI of these

channels.

The Death of Cash

While the expansion of mobile payments at the retail level have lagged

expectations, the same can’t be said for the growth of P2P payments. While still

gaining traction, P2P payment options from the banking sector and from fintech

providers seem poised for even greater acceptance. Bottom line, there is not the

immediate potential of the death of cash, but as more retail purchase transactions

are done digitally, the use and need for cash is definitely going to be impacted.

Impact on Banking: How are financial services organization positioning

themselves within a consumer’s lifestyle? Is your organization going to be a brand

that is at the forefront of the P2P, mono brand equity. Many believe payment

process could be one of the most important components of a new banking

ecosystem that extends beyond just financial services.

Innovations that Will Define Banking in 2019

The global banking sector is becoming both more strategically focused and

technologically advanced to respond to consumer expectations while trying to

defend market share against an increasing array of competitors. A great deal of

emphasis is being placed on digitizing core business processes and reassessing

organizational structures and internal talent to be better prepared for the future of

Mobile Banking App and Beyond P a g e | 23

banking. This transformation illustrates the increasing desire to become a ‘digital

bank’.

The importance of innovation and developing new solutions that take advantage of

data, advanced analytics, digital technologies and new delivery platforms has

never been more important.

Organizations like banks are rapidly innovating, targeting, expanding services, re-

configuring delivery channels, delivering proactive advice, integrating payments

and applying blockchain technology.

By 2019, as global financial and tech giants revolutionize the financial services

arena. As part of these mega-trends, banks will also experiment with new mobile

applications and voice-enabled gadgets to enhance both delivery and contextual

personalization. Ultimately, the consumer will be front and center. As technologies

continue to evolve, the banking sector will continue to accelerate its investments in

innovation and digital enhancements.

According to Accenture, “Many banks have initiatives aimed at targeting

demographic-based clusters such as young people, Millennials or older people,

but some banks are now targeting customers based on lifestyles, values,

aspirations, mindsets and underserved needs.” In 2019, many banking

organizations will go beyond personalization by segment, to develop individualized

communication and experiences for the segment of one. This is the ultimate level

Mobile Banking App and Beyond P a g e | 24

of innovative personalization allowed through data, advanced analytics and digital

technologies.

This level of personalization involves clustering a customer base with advanced

criteria, where human-centric, design-thinking pillars and CRM tools help banks

and credit unions match needs to solutions in real-time. One of the forgotten keys

to success with segment-of-one personalization is estimating the potential

customers’ willingness to pay for this added value. Or maybe, the key to success

is a financial services organization’s willingness to monetize value in the way that

Amazon sets pricing on delivering the value of Amazon Prime. Consumers must

be ready to recognize the value behind a personalization solution and be willing

and able to pay for it.

Innovation and serving a segment of one is not limited to individual consumers.

Banks and credit unions should also focus their efforts on the small and medium

enterprises (SME) segment which is one of the priority sectors of LANDBANK and

the needs of individual businesses. Many financial services organizations are

taking a ‘GAFA’ (Google/Amazon/ Facebook/Apple) approach, leveraging insights

and data derived from services and individual organizations to boost their core

business.

Improving Infrastructure To Reach New Market

According to Akamai’s Q1 2017 State of the Internet Connectivity Report, the

Philippines is the lowest ranking among Asia Pacific countries for this metric, as

Mobile Banking App and Beyond P a g e | 25

well as some of the broadband adoption metrics, but at the same time it has seen

a robust 20% quarterly boost in speed. Significant improvements are expected in

infrastructure as Philippine President Rodrigo Duterte has approved a plan to

deploy a national broadband network at an estimated cost of between $1.5 billion

and $4.0 billion to accelerate the deployment of fiber optics cable and wireless

technologies to improve internet speed further.

Innovating for Tomorrow

To be able to compete and grow where margins are thin, competition is fierce,

regulations are changing and technology has an increasing impact, financial

institutions must place innovation as a top priority. Organizational cultures must be

shifted to support innovations that will impact increasingly outdated business

models. Banks and credit unions must also anticipate consumer needs and

innovate in ways that will prioritize the most effective mix of capabilities, processes

and people.

3.1.2 RELEVANCE OF EXTERNAL ANALYSIS (GENERAL ENVIRONMENT) TO

THE BUSINESS

Market Demand And Opportunities;

Leveraging customer data

Mobile Banking App and Beyond P a g e | 26

To attract new and maintain its existing clients, LANDBANK must offer products

and services that suits client’s preference. A person’s banking needs may change

over the years due to the changing environment e.g. technology and innovation

updates, investment scheme, demographics, etc. and based on financial crisis

encountered many times, the banking landscape is fluid and the economic climate

can dictate what financial services a consumer needs or wants.

LANDBANK need not just guess the needs of their clients and what promotions

and campaigns will be effective and just simply follow the lead of their competitors

or stick to traditional products and marketing which may not be the best fit for the

bank. In this day and age, there is no excuse for any bank who is not taking

advantage of the valuable customer data available to them. Banking institutions

capture customer data and insights from many different sources including ATM

logs, customer email, support center logs and social media.

The bank should continue analyzing the available data and optimize products to

better serve the publics in the pursuit of its mandate. BSP’s thrust to further

deepen and develop a robust capital market through a more liberal policy

environment, taking into consideration adherence to international practices and

standards Leveraging customer data will allow a banking institution’s product

development team to become more customer focused and create products not

available from their competitors. It will also allow sales and marketing to better

manage which customer segments they target, introduce new products, sell

products and eventually achieve bank’s growth.

Mobile Banking App and Beyond P a g e | 27

Banking institutions that act upon the customer data available to them are more

likely to see an increase in the overall number of high lifetime value members

acquired by the institution and improved customer satisfaction rates – both a

consequence of having members who are happy with services tailored to their

needs.

Challenging the norm and targeting untapped markets 

Possibly more than ever before, financial institutions are becoming more daring

and challenging the notions of what traditional banking is supposed to be. The

consumer climate is currently quite welcoming to these challenges and many

consumers are interested to see what new or different banking options are

available to them. On the other side of the equation, banking institutions are now

more open to targeting markets that were previously considered high risk or low

value and not worth an institution’s time. This, however, has always been part of

LANDBANK’s mandate, to promote inclusive growth especially in the unbanked

and underserved areas of the country.

For banking institutions, now may be the perfect time for them to take on the big

guns in banking and go after the consumer segments that are marginalized or

ignored by existing financial institutions. The biggest customer acquisition hurdle

Mobile Banking App and Beyond P a g e | 28

for the Banks is consumer apathy towards changing banking providers. To negate

this, LANDBANK should offer innovative and up to date products and services

which generally beat those being offered by its competitors to prospective clients

like students/millennial, small and medium size business owners and young couple

or first time home/car buyers.

Reaching the Unbanked with Digital

Based on the latest data from Bangko Sentral ng Pilipinas (BSP), only 14% of

households in the Philippines have deposit accounts. The majority of the

remaining 86% unbanked are self-employed, working for a private household or in

other informal occupations.

The main reasons for not having an account are:

• Not having enough money to keep an account;

• Not having the need for a bank/cash account;

• The bank/institution location is too far away;

• They cannot manage an account;

• Service charges are too high and the minimum balance is too high.

These deterrents could be seen as opportunities that banks and financial

institutions could leverage if they put an appropriate strategy in place. Digital Client

Onboarding Attracting new customers and opening accounts for them using a

mobile application is not only the most convenient way from the customers’

Mobile Banking App and Beyond P a g e | 29

perspective, but it is also effective for banks. Most of the banks, however, still

struggle to take the first step. Banks nowadays can use facial recognition and

other biometrics for authentication and can leverage centralized data, which is

usually provided by the central bank or by the government, to complete the

required KYC processes. Ultimately, regulations will determine what can and

cannot be done digitally. KYC requirements are still rigid in some countries, but if

the legal environment is not that favorable, banks can still focus on customer

experience and make the onboarding and account opening process a lot easier

than it is today. Fortunately, BSP is continuously refining the rules and regulations

to boost innovation to improve business actions in the financial sector.

LANDBANK INTERNET BANKING SERVICES

 LANDBANK weACCESS

The LANDBANK weAccess is an institutional Internet banking system which allows

corporate clients to perform banking transactions online. Corporate users can

enroll their Regular Savings and Current Accounts and even view their High Yield

Savings Account.

For added protection, weAccess employs secured encryption, VeriSign digital

verification, and Virtual Token application.

Non-financial services such as viewing of account balance, historical transactions,

and loan availments are some features of weAccess. Clients can also avail of

Mobile Banking App and Beyond P a g e | 30

current account services, grouping of accounts, and download Statement of

Account and remittance application form.

Financial services include the processing of fund transfer, auto debiting or

crediting, fund sweeping, ATM payroll, bills payment, and check book requisition

services.

 LANDBANK iACCESS

LANDBANK iAccess is a retail Internet banking system which allows clients to

manage their LANDBANK accounts through their preferred web browsers, with

guaranteed secured encryption technology for added protection.

By logging on to www.lbpiaccess.com, an enrolled depositor can conveniently

perform financial and non-financial transactions, anytime and anywhere.

Retail Internet banking clients may avail of nonfinancial services such as viewing

of account balance and historical transactions, reporting of lost or stolen card,

inquiring the status and details of issued or returned checks, and adding or

updating of account reference numbers of frequently paid billers. Moreover, clients

may also use the Housing Loan Calculator which features the housing loan

affordability assessment.

Mobile Banking App and Beyond P a g e | 31

Also, iAccess offers financial services that include fund transfer to own account

and nominated third-party LANDBANK accounts, bills payment to over 100 billers,

and check book requisition for enrolled current account/s.

 ELECTRONIC MODIFIED DISBURSEMENT SYSTEM (eMDS)

The LANDBANK eMDS is a secured Internet facility for National Government

Agencies which offers banking convenience to perform Modified Disbursement

System (MDS) transactions online. eMDS implementation addresses the tedious

and costly processing of MDS transactions and aims to eliminate physical

transmission of required MDS documents and reports.

The eMDS transactions cover transmission of Advice of Checks Issued and

Cancelled (ACIC), payment of accounts payable to creditors, and fund allocation

transfer initiated and approved by the government agency, and are processed in a

real-time manner. Checkbook requests are automatically forwarded to the

concerned branch for processing.

Issuance of DOF-DBM JDAO No. 2015-1 enjoining agencies to enroll and utilize

LANDBANK’s eMDS facility also contributed to the 79.3% growth in the number of

transactions totaling 378,210. Likewise, the equivalent amount of transactions

grew by 74.5% or P201 billion, higher than the valued transaction from the

previous year.

MOBILE BANKING

Mobile Banking App and Beyond P a g e | 32

  LANDBANK MOBILE BANKING APPLICATION (MBA)

The LANDBANK Mobile Banking Application (MBA) provides clients with

convenient access to the Bank’s wide array of services through their smartphones,

anytime, anywhere.

By downloading the MBA through the Google Play or App Store, clients can enjoy

the full range of services such as access to balance and transaction history of

deposits, credit card accounts, checkbook requisition, fund transfer, bills payment,

locking or unlocking of ATM card transactions through Mobilock, Foreign

Exchange (ForEx) and Unit Investment Trust Fund (UITF) rates inquiry, and

LANDBANK ATM and Branch locator.

The Mobilock feature was added to the MBA to protect Bank clients against

unauthorized international and/or local access. Through Mobilock, clients have the

option to automatically lock or unlock their enrolled ATM Cards through the MBA.

Since its launch in Jan. 2015 and as of July 2019, there were 2,951,559 active

users of LANDBANK MBA and total of 47,032,608 number of transactions.

3.2 INDUSTRY AND COMPETITOR ANALYSIS

3.2.1 MARKET SIZE /GROWTH RATE

Financial services for the unbanked are among the most promising opportunities

for mobile-telecom operators and banks. It hopes to counter slowing subscription

growth with auxiliary offerings, such as banking services. In emerging markets,

Mobile Banking App and Beyond P a g e | 33

formal banking reaches about 35% of the population, compared with 80 %

penetration rate for mobile phones.

Recent advent of smartphones has changed the scenario and now mobile banking

is a web-based service provided through mobile web. Mobile banking must not be

confused with other features such as mobile wallet that allow transactions through

mobiles at the point of sale. Rising adoption of Smartphones and technological

advancements are primary driving factors for this market. Lack of awareness

regarding the actual features of a mobile app developed for mobile banking is

moderately challenging its adoption

Banks in the Philippines could bring mobile-money penetration rates among the

unbanked into line with those achieved by best-practice operators elsewhere, they

could acquire four to five million new customers and add two to three percentage

points of growth to their revenues. And these numbers do not include earnings on

loans and deposits. Banks offered mobile banking through short messaging

system (SMS).

At present, over half of Filipinos with smartphones used mobile banking services at

least once a week, with the top two reasons being convenience and availability.

Wherein, 85% of Filipinos use their banking apps to check account balances, 63 %

pay their bills on it and 59% transfer money through the app.

Mobile Banking App and Beyond P a g e | 34

 Figure 6 – Mobile Phone Usage

3.2.2 MARKET SHARE ANALYSIS

Philippine banks are currently working on improving their mobile banking

applications to better serve their customers. The top banks in the Philippines have

Mobile Banking App and Beyond P a g e | 35

encouraged customers to use their mobile apps with new and improved User

Interfaces (UI), better security, and the promise of more convenient banking

services. Customers used to line up for hours at the bank to deposit funds. Now it’

is only a matter of logging into a mobile app and sending the money real time,

wherever they are and at any time, as long as they have mobile internet.

While most of the banks that offer these e-banking and e-money applications are

universal and commercial banks, per BSP data report as of June 2017, there are

rural banks that offer mobile banking (1 bank), internet banking through BancNet

online (4), BancNet cash-out aggregator/acquirer services (6), and e-money

prepaid card/cash card/remittance card (1). 1

Table 3 – e-Banking Operations

Number of Banks Authorized by the BSP to Engage in e-Banking

Operations
As of June 30, 2017
Type of Bank No. of Banks with e- No, of Banks
Banking Facilities as with Mobile
approved by the BSP Banking
Application

Universal Banks 19 13

Commercial Banks 16 2

Thrift Banks 24 9

Rural and 11 1
Cooperative Banks

TOTAL 70 25

Mobile Banking App and Beyond P a g e | 36

Gilberto Llanto, Maureen Ane Rosellon and Maria Kristina Ortiz. E-Finance in the Philippines:
Status and Prospects for Digital Financial Inclusion, December 2018.

3.2.3 MARKET ASPECTS

The following list shows the top mobile banking apps in the Philippines for ease-of-

doing business.

BDO Mobile Banking App

Manage and monitor all enrolled BDO accounts, including transaction history
Send money to own BDO account/s, and other BDO accounts, free of charge
Pay bills not just for your BDO credit card, but also other billers
One-time-password generator via SMS every time you log in to the app
Buy load or reload debit account
Check and manage credit card points
Features fingerprint authentication for added security

Mobile Banking App and Beyond P a g e | 37

BPI Mobile Banking App
Manage and monitor all your enrolled BPI accounts – BPI, BPI Family Savings, BPI
Direct deposit accounts, BPI credit cards, and even your BPI Investments accounts
Access your BPI mobile banking app using your fingerprint, PIN, or pattern you’ve
personally set up
Transfer funds to your enrolled BPI accounts, or any other BPI, BPI Family Savings,
or BPI Direct deposit account
Pay for your transactions with over 400 partner merchants nationwide
Manage, monitor, and redeem from your investment accounts
Load any BPI Express Cash card or BPI My ePrepaid card
Buy Globe/TM load
Check the latest Forex Rates
Apply for a BPI bank product, such as a home loan or a car loan
BPI Social Feeds to get the latest news, updates, and even BPI credit card promos
Option to enroll third-party bank accounts – this requires ATM activation or a
signed form

Unionbank Mobile Banking App

Manage and monitor all your enrolled Unionbank accounts
Transfer funds to your enrolled Unionbank accounts, or to other Unionbank
accounts, and also to major local banks (this may take around 2-3 banking days for
non-bank money transfer)
Pay bills on schedule
Buy load for any local number
Quick balance feature – check balance without signing in

Mobile Banking App and Beyond P a g e | 38

Metrobank Mobile Banking App
Manage and monitor all your enrolled Metrobank accounts
Transfer money to other accounts – add your friends’ accounts and customize the
list
Transfer money to own account
Send and Request money
Send and Request load
Reorder your checkbook
Pay bills
Buy load
Be the first to know of Metrobank news and credit card promos
Branch Locator
Apply for Metrobank home loan and car loan – use the corresponding loan
calculators to get an estimated monthly installment when applying for a home or
car insurance. You may also request assistance from a Metrobank loan specialist
from your phone.
Check the latest Forex Rates

Asia United Bank Mobile Banking App

Redimoney – make balance inquiries and view your transaction history
Remittance – make transaction inquiries and locate local and international
remittance centers
Loans – check your loan balance, payments due, and loan application status
Virtual Teller – enter transaction details and get your queue slip anytime, anywhere
Branch Locator to find AUB branches and ATMs near you
AUB Security Token

Mobile Banking App and Beyond P a g e | 39

Eastwest Mobile Banking App
View available balance
Deposit checks
View your enrolled EastWest bank account/s’ transaction history
Transfer money between East West Bank enrolled accounts for free
Pay and manage bill payments
Find Branch locations for the nearest EastWest bank or ATM
Talk to a service representative

RCBC Mobile Banking App

Fund Transfer to own enrolled bank account, other enrolled RCBC bank account, and
third-party bank accounts
Bills payment – Credit Card, Life Insurance, Government Services, Loan payments,
and Schools and Universities
Other services – Checkbook request, Remittance Inquiry, and Time Deposit
Placement
Branch locator for an RCBC branch and ATM nearest you

PNB Mobile Banking App

Fingerprint login
Monitor and manage your enrolled PNB bank account/s, and view transaction
history
Transfer funds to other enrolled PNB accounts
Pay bills
Order a Checkbook
Branch locator for a PNB branch or ATM nearest you

UCPB Mobile Banking App

Check Balance
Transfer Funds to own enrolled UCPB account, and to other bank accounts
Pay Bills – Utility Bills, Telecom, Credit Card, and Insurance
Buy Cellphone Load
View Transaction History
FAQ page

Mobile Banking App and Beyond P a g e | 40

 LBP Mobile Banking App
Manage and monitor your savings and current deposit accounts
Check the balance of your LANDBANK Credit Card and Cash Card accounts
View transaction history
Transfer funds from your iAccess enrolled LANDBANK savings and current deposit
accounts to an iAccess enrolled third-party account, to a non-enrolled account in
iAccess, and interbank fund transfer to any BancNet Member Bank
Pay your bills with over 80 merchants
View Forex and Unit Investment Trust Fund rates
Branch locator for LANDBANK branches and ATM sites near you
Request for checkbooks
One-Time PIN (OTP) Generator via SMS
Link to Electronic Payment Portal (EPP)

3.2.4 FACTORS AFFECTING COSTS OF DOING BUSINESS

Some of the factors that affect the optimal adoption of mobile banking services

include:

 Technology

The different mobile devices available in the local market should have hardware

architecture and operating systems that can support the banking applications. The

current systems have their failings while supporting different applications and

interfacing on different communication networks.

 Usability

Various studies have examined the aspect of resistance of users to accept

innovations and changes, and identified factors impeding the acceptance of mobile

technology. A major limitation to usability of mobile devices has been the

Mobile Banking App and Beyond P a g e | 41

inconvenience in inputting data. The latest generation of devices have been

resolved these limitations by the introduction of touch screen technology. Banking

applications need to address this issue to provide the consumers ease of use.

Applications need to have the facility of continuing usage even after disruption of

mobile communications without compromising on security. Potential to use

applications offline would enhance their usability. The applications must lead them

to ease of usability by providing shortcuts to frequently used transactions. The

users must not have to resort to lengthy inputting to access data.

 Security

Security risk has two main elements. First, perceived risk grounded in concerns

with regard for the technical performance or functional reliability of the service

delivery system. Second, perceived security risk may be associated with concerns

about personal security and privacy. Technology use is predicated on the

perception that the service delivery system will perform to the satisfaction of the

user in terms of functioning reliably and providing the requisite personal

assurance.

In the purchase decision-making processes, consumers mainly consider security

risk associated with the acquisition of a service or product. Generally, consumers

attach more risk to intangibles as compared to physical goods. Experience and

use diminish the perceived risk associated with utilization of a new product or

service. Thus, the history of consumers’ usage of mobile communications services

is taken to be a useful criterion for segmenting a market by innovativeness

Mobile Banking App and Beyond P a g e | 42

categories. In summary, these finding suggests that mobile phone banking must

be secure. For instance, when one loses the handset, loss of service must have

limited impact where the service could support a remote locking feature embedded

in the software that prevents a lost phone from accessing the customer’s account.

Data integrity against unauthorized modification must be provided. In addition,

data transmission must be secure and application and data access must be

controlled. Therefore security or lack thereof must be addressed in order to

encourage the utilization of mobile banking.

 Cost

Price is an important factor that influences the utilization of the technology. In

times of increased competition, a distribution channel must organize business

processes efficiently so as to reduce distribution costs. In Mobile Banking there are

three costs a) normal costs associated with mobile phone providers’ activities, b)

the bank cost and charges and c)the cellular phone cost.

The cost of mobile devices though a one off cost, makes mobile banking as costly

as other forms of banking. If the cost of mobile devices is very high, this

discourages account holders from acquiring them hence impending the utilization

of mobile banking services Price is perceived to be the most important

consequence of mobile (m) -commerce utilization compared to convenience,

security, privacy and efficiency. As a result, mobile banking providers need to pay

particular attention to their pricing strategy with the objective to uneven the

Mobile Banking App and Beyond P a g e | 43

potential factors that encourage or discourage its utilization. Affordability in mobile

banking varies by number, size and type of transactions.

A major utilization obstacle is the high charges levied by the mobile service

providers. It would be possible for the regulators to set maximum prices for quota

volumes of SMS and other mobile messaging systems which are dedicated to

mobile banking systems. As these new low-cost (or even zero-cost) mobile

banking services emerge, a way for the existing players to keep them out of the

game will be to make inter-bank ICT systems unaffordable and/or too complex to

be participated in. Regulators can have a role in controlling or eliminating that

tendency by setting maximum charges and on insisting on simple but secure

interoperability standards.

3.2.5 OPERATIONS/PRODUCTION ASPECTS

Operations Aspects

It concerns everything that interacts with the phone from the outside and how the

mobile application reacts or response.  There are two (2) issues:

 Connectivity - This is mainly the data/wifi network of your mobile device

 Interruptions - These are the notifications encountered by the user:

Mobile Banking App and Beyond P a g e | 44

 o Battery Status Notification

o Incoming Phone calls

o SMS

o Other Mobile applications (Messenger, Viber, IG)

o Phone System Updates

3.2.6 TECHNOLOGY DEVELOPMENTS

Some banks are now providing a downloadable application that mobile

subscribers can use to access bank services. These mobile applications offer a

reliable channel and enable users to conduct even complex transactions. They

also allow banks to customize the interface and brand it accordingly.

Although this solution likely represents the future of mobile banking, there are

some issues. First, users are forced to download, install and learn a proprietary

application. Not only that, the application must be customized to each mobile

phone on which it will reside, greatly increasing development costs. And just like

the mobile browsers used in WAP banking, these standalone applications are

vulnerable to attacks, have limited availability and can only accommodate

customer-initiated communication.

As a financial institution prepares for the mobile banking revolution, it must weigh

the advantages and disadvantages of these various solutions to decide which one

best meets the needs of its customers and its own technology infrastructure.

Mobile Banking App and Beyond P a g e | 45

3.2.7 INDUSTRY FINANCIAL ANALYSIS

With increasing number of smartphone users, mobile banking subscribers are also

expected to grow in millions, having banks shift their focus to customer mobile

transactions. It is both preferable and comfortable for users to conduct

transactions using their smartphones, giving banks an opportunity to gain a

competitive leverage over others and position themselves better in the market. M-

banking also facilitates mapping, recording and studying customers’ financial

transactions and behavior and offer customized services accordingly; allowing

banks to gain customer loyalty.

Though time and place convenience and user friendly interfaces for conducting

easy banking are aiding in the rapid growth of mobile banking, security is a crucial

factor for mobile banking adoption. Service providers also need to overcome

handset operability issues by developing stable applications to suit various

currently available platforms. Development of new innovative technologies to

complement other applications on the user device is essential for this purpose.

Connectivity and network infrastructure also become a hindrance in the growth of

the user base, resulting into poor user experience, calling for focus on overall

experience enhancement by requisite investment in developing stable yet flexible

software, technological platforms and applications.

Mobile banking is booming in regions were a major under-served or under-banked

population exist in spite of the technological advances or newly experiencing the

smartphone boom. Market adoption here varies significantly among saturated and

Mobile Banking App and Beyond P a g e | 46

unsaturated countries being slow, intermediate or advanced, developing countries

such as India, China, Bangladesh, South Korea, parts of Latin America and Africa

and Brazil seeing a robust growth compared to developed regions of Germany,

UK, France, Australia and Thailand.

Few m-banking facility providing participants are Aepona, ABSA, Comviva, C-

SAM, Don River, LUUP, Google, Obopay, Sybase, eSery Global Ltd., Monitise,

SunTrust, Harris Online, Vesta, Union M-Banking, Arvest, Visa, TCF and PayPal

Mobile replacing services provided by MoneyGram and Western Union.

3.2.8 PROBLEMS IN THE INDUSTRY

Banking as we know is changing. Initiatives such as Open Banking and regulatory

frameworks are creating the driving forces to open up once closed banking

platforms, creating a tremendous push for innovation. New banking players are

also entering the space, bringing with them new forms of banking such as Peer-to-

Peer payments, often built around mobile apps. This disruption is resulting in

massive growth in the sector. At the same time, adoption rates of mobile banking

apps is growing exponentially as well

Challenges come with any change in the way we do business. A more open

network and different ways of moving money open new opportunities for online

banking fraud. Mobile banking fraud prevention is an area that has many

challenges, but one where certain technologies, including continuous

authentication, have the potential to provide a solution. 

Mobile Banking App and Beyond P a g e | 47

The Challenges in Mobile Banking Security

Fraud is the bugbear of banking. In a previous blog post on “On The Go: How

Mobile Redefines The Way We Bank” we talked about how mobile banking was

disrupting the industry and how online fraud will most likely move towards the

mobile platform.  

As mobile device use for banking increases, it creates new opportunities for

fraudsters, giving malicious actors new inroads into our bank accounts and

personal data. A McAfee survey of mobile threats found they are “steadily

growing” with banking Trojans that can steal login credentials, increasing by 40%.

One such Trojan is the infamous ‘Faketoken’ which overlays a fake UI and can

even steal SMS codes sent to users for second-factor authentication. 

1. Security Measures That Ignore User Experience Lose Relevance

Compounding the problem of mobile banking malware is user behavior.

An report found that more than half of consumers show risky behavior and do not

understand the risks of fraud. In a report by Accenture on mobile banking, they

found that a staggering 43% of users do not even use a passcode to manage

access to their device. This is due to friction. As a result of increased friction,

users often avoid two factor authentication even when conducting sensitive

transactions on mobile devices. According to studies, consumers generally

use static passwords instead.

Mobile devices have a number of security issues that have either been inherited

from general Internet security known issues or have become inherent in the

Mobile Banking App and Beyond P a g e | 48

platform. The OWASP Top Ten Mobile security threats for 2016, lists the 10 most

common security issues in mobile devices; in at number 4 is insecure

authentication.

 Solving the Challenges of Mobile Banking and Security

Mobile banking is convenient and customers are taking it up droves. But the

banking community needs to protect both money and the reputation to provide

exemplary service - both on and offline. In the report by Accenture, they conclude

that

multi-factor authentication makes online banking more secure by reducing the

exposure for the single greatest threat to account takeover, phishing and

misappropriated account credentials.

A strong authentication measures have to be in place to prevent fraud. Having a

forward-thinking program in place to build secure and user friendly mobile banking

will bring rewards to the banking sector.

Multi-factor authentication can be seen as a layer of friction for the user. However,

using it smartly can balance both the security and the UX of mobile banking. The

use of behavioural biometrics takes multi-factor authentication to a  new level of

both security and usability. It uses the natural interactions that users have with

their mobile devices to identify patterns of behavior to validate and refine

authentication for mobile banking applications. It solves the dual challenge of user

authentication fatigue and mobile banking malware.

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 Making Mobile Banking Secure

Limitations of authentication models for mobile banking apps mean bank CISOs

need to approach fraud detection differently. Banks who provide a secure and at

the same time frictionless mobile banking experience will be rewarded with happier

customers who will spread the word. Having a system of continuous authentication

built on smart behavioral biometrics can bridge the gap between usability and

security to create frictionless mobile banking experience.

3.2.9 CRITICAL SUCCESS FACTORS IN THE INDUSTRY

Mobile phones and the internet can drive financial inclusion only if they are

underpinned with the following:

1. Physical Infrastructure

Reliable electricity and mobile networks are key. People will be less inclined to

use digital payments if network outages or other technical problems undermine

their dependability.

2. Enabling environment

A consumer protection rules is critical to safeguard people from fraud and abuse.

This is especially important for women and low income people, who are almost

unfamiliar with banking terminologies/processes. Another thing that can be

initiated are financial inclusion such as financial literacy programs and introducing

tired documentation requirements that would require offering of basic or low-fee

account.

Mobile Banking App and Beyond P a g e | 50

3. Leveraging digital technology among the unbanked

Simply having a mobile phone can potentially allow access to mobile money

accounts. Hence, ny lowering the cost of providing financial services, digital

technology might be helpful for those citing high costs as reason for not having an

account at a financial institution.

4. Digitizing payments and domestic remittances

Government could bring millions of unbanked adults into the formal financial

system by distributing transfers through digital payments rather than in cash.

b. From businesses to people. Businesses could boost account ownership by

paying their unbanked employees through account rather than in cash.

3.2.10 Porter’s Five Forces Model

Table 4 - Porter’s Five Forces Model

Porter’s Five Forces Model

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 Rivalry among competitors High

Threat of substitutes Low

Threat of new entrants Medium

Bargaining power of suppliers Medium

Bargaining power of
Low
consumers

RIVALRY AMONG COMPETITORS

The banking industry, being as it is, an industry that is difficult to penetrate as the

government regulates the establishment and organization of banks in the country.

This implies that there are not so many banks operating in the Philippines.

Competition in the banking industry is very tight.

Since all of the top performing banks have their own the mobile banking

application, rivalry among competitors is high. Each bank has its own strategy to

outperform another when it comes to the mobile banking application.

THREAT OF SUBSTITUTES

Considering the difficulty in entering the banking industry and the competitive rates

and charges, there remains a possibility of substitutes to cater clients who are not

able to transact with online banking. The business of banking transactions using

the traditional service or other means is the main substitute. Nonetheless, the

threats are still relatively low to medium because not all banking services can be

Mobile Banking App and Beyond P a g e | 52

substituted instantly by other channels such as the other online financial payment

services and credit card services. Although the enhanced mobile application which

includes handling of complaints may be substituted by the normal complaints

handling, switching from a primary bank’s services to avail of another is a lesser

kind of threat of substitute due to the differences in the new service and innovation

caused by the competitive pressure brought about the tight competition in the

digital banking industry.

THREAT OF NEW ENTRANTS

Being imbued with public interest and its nature being fiduciary, the banking

industry requires itself to be regulated. The law provides for strict compliance in

the requirements for the establishment of banks in the Philippines. As for brand

loyalty, most customers prefer more established banks which have proven

themselves through the test of time.

However, the banks are more aggressive when it comes to digital banking

solutions, hence the threat of new entrants for the same enhancement of mobile

application is weighted as medium.

BARGAINING POWER OF SUPPLIERS

Such bargaining power is low in the banking industry. The services provided by the

Mobile Banking App and Beyond P a g e | 53

banking industry cannot be easily substituted. While differentiation of services are

also limited. There is also the possibility of forward integration. Taking all these

factors it shows that suppliers have little power the banking industry.

But for the mobile banking application, the bargaining power of the suppliers in the

form of mobile operators is medium. Mobile operators have a large impact on the

future for mobile commerce. They have been the leaders in the development and

success of mobile communication. A risk may therefore be that the operators may

take charge over some part of mobile banking.

BARGAINING POWER OF CONSUMERS

The consumers’ bargaining power is a major force which affects the level of

competition in the banking industry. However, their bargaining power is only

medium. There may be stiff competition in banks, nonetheless, their services

cannot be easily replaced or substituted. Consumers do not have much power in

controlling banks and their services. Moreover, the governments’ regulation also

hinders banking in constantly changing and updating their services without

compliance with the requirements.

But with the rise in the use of mobile banking applications, customer needs and

expectations are becoming higher. Although the number of buyers if mobile

banking application services are still small in the industry, there is still a great

potential of customers to bargain for better products and services.

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3.2.11 COMPETITIVE PROFILE MATRIX

Table 5 – Competitive Profile Matrix

FACTORS COMPETITORS
LANDBANK BDO METROBANK
Critical
Success Weighted Rate WS Rate WS Rate WS
Factors
Financial
.30 4 1.20 4 1.20 4 1.20
Position
Customer
.12 4 .48 3 .36 3 .36
Loyalty
Customer
.22 3 .66 4 .88 4 .88
Service
Market
.16 4 .64 4 .64 4 .64
Share
Innovation .08 3 .24 4 .32 3 .24
Manageme
.12 4 .48 4 .48 4 .48
nt
TOTAL 1.00 3.70 3.88 3.80
Ratings: 4 = Major strength, 3 = Minor strength, 2 = Minor weakness, 1 =
Major weakness

The Banking industry generally considers financial position, customer loyalty,

customer service, market share, innovation and management experience as

Critical Success Factors.

Financial position is given the heaviest weight since a stable financial position of a

Bank is necessary to be able to fulfill a business of circulating, saving, lending,

investing money and securities. Based on the matrix LBP, BDO and MBTC can

consider their financial position as their major strength.

Mobile Banking App and Beyond P a g e | 55

Customer Service received the second heaviest weight since it is where clients

feel valued. Normally banks offer almost the same products and services while

treating customers right, providing and delivering professional, helpful, high

quality service and assistance before, during, and after

the customer's requirements are met and exceeding their expectations help

businesses engage customers and build strong relationships and eventually retain

customers since keeping loyal customers is less expensive than getting new ones.

BDO and MBTC both have established Help Desks or Customer Assistance

making customer service their major strength while LBP needs to do some

process improvement to be at par with these banks.

Bank assets are also critical success factors. BDO market share is relatively

higher than that of LANDBANK’s and MTBC thus receiving a higher rating. Such

ranking contemplated the bank’s receivables and deposits.

Customer loyalty and management experience are given similar weight seeing that

the way how the bank is being managed affects its clients. Client satisfaction with

the bank’s services and its management contributes to the clients’ retention and

loyalty with the bank. All three banks received equal ratings for both factors with

LBP scored a little higher for customer loyalty due to its mandated sector.

Lastly, innovation in the banking industry is a critical success factor due to the fact

that technology has been integrated in banking and financing solutions such as

Mobile Banking App and Beyond P a g e | 56

mobile and online banking. Further innovations that suit and adapt to social trends

and clients’ needs also contribute to client retention. BDO and MBTC are rated

higher than LANDBANK considering their wide-range of services such as e-

Banking, mobile banking, online banking and phone banking and remittance

services

3.2.12 COMPETITOR ANALYSIS

Table 6 – Competitor Analysis

COMPETITORS
As of March LANDBANK BDO METROBANK
2019
Asset 1,895,104.59 2,889,812.21 1,912,883.25

Capital 136,468.10 337,734.54 287,592.34

ROE 13.25 10.69 9.67

Loan 850,811.73 1,978,829.65 1,087,013.19

Deposit 1,676,507.80 2,308,569.61 1,362,404.63

In Million Pesos

Metropolitan Bank & Trust Co. was incorporated on September 5, 1962 by a group

of Filipino businessmen principally to provide financial services to the Filipino-

Chinese community. It is one of the largest banking and financial institutions in the

Philippines. It is engaged in banking, financing, leasing, real estate and stock

brokering services. It is a multi-awarded bank with a solid track record for over fifty

years. The bank offers its full range of services to large local and multinational

corporations, middle market, small market entrepreneurs, high net worth

individuals and retailers.

Mobile Banking App and Beyond P a g e | 57

BDO Unibank was established on January 2, 1968, as Acme Savings Bank, a thrift

bank with just two branches in Metro Manila. In November 1976, Acme was

acquired by the Sy Group, the group of companies currently owned by retail

magnate Henry Sy, and renamed Banco de Oro Savings and Mortgage Bank.

In December 1994, BDO became a commercial bank and was renamed Banco de

Oro Commercial Bank. In September 1996, BDO became a universal bank, which

led to the bank's name being changed to the current Banco de Oro Universal Bank

(BDO Unibank). It is one of the many banks owned by a Chinese-Filipino in the

Philippines.

Figure 7 – Ranking as to Assets (in Million Pesos)

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 Figure 8 – Ranking as to Capital (in Million Pesos)

Figure 9 – Ranking as to Return on Equity (in Million Pesos)

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Figure 10 – Ranking as to Loans (in Million Pesos)

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 Figure 11 – Ranking as to Deposits (in Million Pesos)

3.2.13 EXTERNAL FACTOR EVALUATION ANALYSIS

The globalization in the banking industry shows platform and motive for product

and market development. Seeing as there will be new markets, a development of

products is an opportunity for gaining potential customers as well as to adapt to

future trends and remain competitive with other banks come the integration. The

change is necessary, thus, development is relatively possible. This is why

Opportunity 5 has a weighted score of .60 in the matrix.

Opportunity 1 has been given the same great weight in the matrix. Aside from the

future integration, the adaptation of the people of mobile banking continues to rise.

Banking customers now handle more of their banking interactions, on average, via

smartphones and tablets than through any other channel and the mobile channel

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has become a key element in the bid to earn customer loyalty. In line with this, it

gives LANDBANK the opportunity to make most of the new mobile capabilities,

especially when not all banks are not capable of such services yet.

Multi-channel means accessing with more than one banking channel. Despite

mobile banking rising to mass appeal, clients still prefer combining digital and

physical channels in banking. Bain and Company, Inc. sees that this is critical for

effective service, marketing and selling, because customers expect to be able to

switch from one channel to another. It gives LANDBANK the chance to access

more clients by focusing on Multi-channel customers, thus it is given the heaviest

weight in the matrix.

The Philippine economic condition also had provided probable opportunities to the

banking industry. As the service sector remains strong, banks and its services

continue to remain strong. Moreover, the increase in demand for skilled Filipino

workers abroad in turn give an increase in remittances.

This rise in mobile banking is also susceptible to threats. There is this hidden

defection of customers who go to another provider for additional products. As well

as dependence on mobile banking reduces customer and bank manager

interaction and relationship. ATM usage will also be threatened to decrease, as

increase in mobile banking continues. Most of these threats are interrelated that is

why their weights are also in close ranking with the others. However, the greatest

weight in threats is given to Threat 4, wherein the scope of mobile banking

continuous widening, the susceptibility of the bank’s information and client

Mobile Banking App and Beyond P a g e | 62

database to security breaches also increased.

3.2.14 EXTERNAL FACTOR EVALUATION (EFE) MATRIX

Table 7 – EFE Matrix

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 KEY EXTERNAL WEIGH RATIN WEIGHTED
FACTORS T G SCORE
OPPORTUNITIES
 Rise in demand for
mobile banking .20 4 .80
applications
 Increase in loyal online
and multi-channel .12 4 .48
customers
 Harnessing mergers and
acquisitions to access the .03 3 .09
talents needed
 Boosts in loans to priority
.05 4 .02
sectors
 Banking sector
.20 3 .60
globalization
 Increase in strength and
profits from remittances .10 3 .30
from OFWs
THREATS
 Bank switching due to
.05 4 .02
ATM system error
 Decrease in online, ATM
and branch usage due to
.03 3 .09
rise in mobile payment
(paymaya, grabpay, gcash)
 Possibility of abolition
due to non-pursuance of .07 3 .21
bank mandate
 Vulnerability to security
breaches and attacks due
to increase in digital assets .15 4 .60
in banking and financial
institutions
TOTAL 1.00 - 3.11
Ratings: 4=Superior, 3=Above average, 2=Average, 1=Below Average

The globalization in the banking industry shows platform and motive for product and

market development. The change is necessary, thus, development is relatively possible.

This is why Opportunity 5 has a weighted score of .60 in the matrix.

Mobile Banking App and Beyond P a g e | 64

We also put more weight to Opportunity 1 since aside from the future integration,

the adaptation of the people in mobile banking continue to rise. Banking customers

now handle more of their banking interactions, on average, via smartphones and

tablets than through any other channel and the mobile channel has become a key

element in the bid to earn customer loyalty. In line with this, it gives LANDBANK

the opportunity to make the most of the new mobile capabilities, especially when

not all banks are capable of such services yet.

On the other hand, the rise in mobile banking is also susceptible to threats. There

is this hidden defection of customers who go to another provider for additional

products. As well as dependence on mobile banking reduces customer and bank

manager interaction and relationship. ATM usage will also be threatened to

decrease, as increase in mobile banking continues. Most of these threats are

interrelated that is why their weights are also in close ranking with the others.

However, the greatest weight in threats is given to Threat 4, due to a

comprehensive scope of mobile banking, the susceptibility of the bank’s

information and client’s database to security breaches also increased.

3.2.15 MOBILE BANKING EVALUATION FRAMEWORK (MoBEF)

Table 8 - MoBEF

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 EVALUATION COMPETITORS
FRAMEWORK LANDBANK BDO METROBANK
Concise and Clear Concise and Concise and
Consistent use of Clear Clear
color and background Too much use Consistent use
Effective use of if white of color and
graphics background background
Icons easy to Very minimal Effective use of
understand graphics graphics
Less icons Icons easy to
understand
Interface

Main menu are Other main Main menu are

understandable menu are understandable
Several hidden sub- hidden Easy to find the
menu Easy to find site
Easy to find the site the site Separate mobile
Navigation
Separate mobile Mobile banking banking page
banking page from page is not from the rest of
the rest of the pages separate from the pages
Not lagging the page Not lagging
Lagging
Mobile banking Mobile banking Mobile banking
information information information
Terms and condition Terms and Terms and
Company information condition not condition
and contact numbers visible Company
Content Information quality Company information and
data privacy information contact
and contact numbers
numbers not Information
available quality data
privacy

Mobile Banking App and Beyond Complaints

P a g e | 66
handling thru
Based on the above MoBEF, LANDBANK Mobile Application is considered at par

with its competitors. However, it can also be noted that there is lacking in the

services to cater the filing of complaints directly using the mobile app. Customers

still need to either call or send email to their respective customer hotline, which is

very tedious on the part of the customers. Filing of complaints usually takes longer

than the Turn-Around-Time if it is made through a customer hotline unit instead of

directly sending it to the reconciling unit.

3.2.16 CUSTOMER COMPLAINTS ANALYSIS

Based on the customer complaints analysis from BDO under Bangko Sentral ng

Pilipinas’ (BSP) Consumer Assistance Management System (CAMS), large

number of complaints being filed by customers are invalid. Invalid complaints

consist of customer queries on the details of transactions, unauthorized

withdrawals and other transactions that are merely forgotten by the customers. To

quote “In 2018, CAMS logged over 8 million customer cases of which only 495,782

(5.972%) were problem-related in nature and only 183,326 (2.2%) were valid

complaints. A majority of the cases were inquiries (55%) and requests (39%).”

Mobile Banking App and Beyond P a g e | 67

 Said transactions causes confusion to the customers and are all being processed

and handled by the banks which involve various cost on manpower, supplies and

utilities.

The above scenario also happens to LBP and other banks. However, data on

CAMs for other banks are not yet available. However, it is observed that year on

year, the banks are spending costs which can be managed by the enhancement of

the mobile applications. It will not just strengthen the banks reputation in handling

speedy recovery on the valid claims but also strengthen the customer’s trust and

confidence in making various bank transactions.

MODULE FOUR – INTERNAL ENVIRONMENT ANALYSIS

4.1 KEY PERFORMANCE INDICATORS

LANDBANK is guided by the Strategy Map shown in the figure below. This map is

gearing in the direction to fulfill its mission and vision. The enhancement in the mobile

banking application will support in its internal process to streamline banking operations

through digital platforms to further support inclusive banking.

4.1.1 Strategy Map

Figure 12 – LANDBANK Strategy Map

Mobile Banking App and Beyond P a g e | 68

4.1.2 Performance Scorecard

LANDBANK’s performance scorecard shows that it continuously hits its target in

each mandates and some even went beyond.

Table 9 – Socio Economic Impact

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It’s socio-economic impact showed an increase of P4.5 billion for the loans to 20

poorest provinces as identified by the PSA while a huge amount of P28.91 billion

was from the agriculture and fisheries sector, which are both belong to

LANDBANK’s priority sectors.

Table 10 - Financial

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LANDBANK’s financial performance in the loans supporting Other Government

Programs grew by 10.62% while the growth in Stable Deposits was at 14%.

Moreover, the increase in net income realized in 2019 during the same period in

2018 was 10%.

Table 11 - Stakeholders

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For LANDBANK’s Stakeholder sector, it continuously provides timely, accessible

and responsive products and services on Multiple Platforms and Customer

Touchpoints. It’s target projects were at a 90-100% completion rate.

Table 11 – Stakeholders (continuation)

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 Table 12 – Internal Process

For LANDBANK’s internal processes, Turn-around-time (TAT) was reached at

100%. In addition to that, there is a new project to streamline banking operations

through digital platforms to support inclusive banking to the unbanked areas

known as Agent Banking.

Table 13- Learning and Growth

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 Table 13- Learning and Growth (continuation)

In LANDBANK’s Learning and Growth aspect, it established a high performance

“One Bank” culture which aimed and achieved 100% in addressing employees

competency gaps. It also continuously implements the Quality Management

System and has already met the intitial Integrated Management System

Certification.

4.1.3 THREE-YEAR PERFORMANCE MEASURE

LANDBANK is the 3rd biggest universal/commercial bank with total assets of P1.9

trillion. Its stockholder’s equity – the amount of assets the bank has minus its

liabilities – stands at P136.5 billion, while its total deposits as of March 2019

reached P1.7 trillion – second to the Sy family-owned BDO Unibank’s P2.3 trillion.

In the same period, LANDBANK also had P850.8 billion in its total loans and

receivables portfolio.

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The figures below show LANDBANK’s ranking over the three year period based on

metrics: Asset, Loans, Deposits and Capital.

Figure 13 – Top Ten Commercial Banks for 2016

Figure 14 – Top Ten Commercial Banks for 2017

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 Figure 15 – Top Ten Commercial Banks for 2018

While LANDBANK is not the leading bank in the Philippines in the four metrics

mentioned above, it is consistently included in the Bangko Sentral ng Pilipinas’

(BSP) top 5 rankings of universal/commercial banks as of March 2019.

Meanwhile, the bank’s return on equity ratio stands at 13.25% – only the 8th

highest out of the 45 universal/commercial banks listed by the BSP. Return on

equity is a known measure of profitability and of how well the company generates

income growth by utilizing the equity investments of its shareholders.

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 Table 14 – Bank Rankings as to Return on Equity

  Ranking as to Return on Equity  

  Universal and Commercial Bank Group  
  As of March 31, 2019  

  RANK  NAME OF BANK ROE  (%)

JP MORGAN CHASE BANK NATIONAL ASSN.
  1 44.53  
CITIBANK, N.A.
  2 38.40  
DEUTSCHE BANK AG
  3 30.69  
BDO PRIVATE BANK, INC.
  4 18.66  
UNITED COCONUT PLANTERS BANK
  5 18.10  
ASIA UNITED BANK CORPORATION
  6 14.52  
HONGKONG & SHANGHAI BANKING CORP
  7 13.49  
LAND BANK OF THE PHILIPPINES
  8 13.25  
EAST WEST BANKING CORP
  9 11.97  
DEVELOPMENT BANK OF THE PHIL
  10 11.82  
PHIL BANK OF COMMUNICATIONS
  11 11.75  
MUFG BANK, LTD.
  12 11.52  
BANK OF AMERICA N.A.
  13 11.45  
BDO UNIBANK INC
  14 10.69  
BANK OF THE PHIL ISLANDS
  15 10.65  
MIZUHO BANK LTD - MANILA BRANCH
  16 10.46  
UNION BANK OF THE PHILS
  17 10.26  
MEGA INT'L COMM'L BANK CO LTD
  18 9.77  
METROPOLITAN BANK & TCO
  19 9.67  
KEB HANA BANK - MANILA BRANCH
  20 8.98  
SECURITY BANK CORP
  21 8.39  
CHINA BANKING CORP
  22 8.32  

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 INDUSTRIAL BANK OF KOREA MANILA BRANCH
  23 7.77  
MAYBANK PHILIPPINES INCORPORATED
  24 7.11  
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
  25 6.84  
PHIL NATIONAL BANK
  26 6.66  
RIZAL COMM'L BANKING CORP
  27 6.61  
ING BANK N.V.
  28 6.03  
CTBC BANK (PHILIPPINES) CORP
  29 4.41  
SHINHAN BANK - MANILA BRANCH
  30 3.26  
BANGKOK BANK PUBLIC CO LTD
  31 3.08  
BANK OF CHINA LIMITED-MANILA BRANCH
  32 1.84  
FIRST COMMERCIAL BANK LTD MANILA BRANCH
  33 1.51  
ROBINSONS BANK CORPORATION
  34 1.36  
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH
  35 1.36  
UNITED OVERSEAS BANK LIMITED MANILA BRANCH
  36 1.12  
PHIL TRUST COMPANY
  37 1.05  
CATHAY UNITED BANK CO LTD - MANILA BRANCH
  38 0.00  
CHANG HWA COMMERCIAL BANK LTD - MANILA BRANCH
  39 0.00  
CIMB BANK PHILIPPINES INC
  40 0.00  
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH
  41 0.00  
STANDARD CHARTERED BANK
  42 -1.30  
INDUSTRIAL & COMM BANK OF CHINA LIMITED - MANILA BRA
  43 -1.51  
BANK OF COMMERCE
  44 -1.93  
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS
  45 -34.91  
LANDBANK grew its first semester net income by 36% to P10.58 billion from

P7.79 billion in the same period last year. This is also 27% higher than the Bank’s

semestral net income target of P8.32 billion.

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Return on equity for the six-month period was at a healthy 14.10% while net

interest margin stood at 3.53%, both above latest industry averages.

LANDBANK’s profit continues to surge as it reached more than its target in the

2019 first semester report. Moreover, the table below shows it’s three-year leaps in

its net income from 2016-2018.

Table 15 – LANDBANK Net Income

YEAR NET INCOME (in billion pesos)

2016 13.58
2017 14.05
2018 15.50

4.1.4 Value Chain Analysis

Figure 16- LANBANK Value Chain

SUPPORT ACTIVITIES
MARGIN

Technological Development
Human Resources
Infrastructure
MARKETING
Risk Management
Advertising
Mobile
SALESBanking App and Beyond P a g e | 79
Branding PRODUCT
Multi-Channel
Sales Support
 Market Expansion
Deposit
Product and Service Payment/Clearing
Offering Loan
Settlement
Investment
Trading
Remittance
E-banking

Marketing:

Marketing has a special significance for LANDBANK. Competition has grown

intense in the Philippine Banking Industry and there are more agressive players in

the industry. As such marketing becomes important for LANDBANK to avoid the

competitive pressures. Attracting and retaining customers requires more focus on

marketing. Moreover, segmentation is important for LANDBANK as all the

consumer segments cannot be targeted in the same manner. Brand image is also

an important concern for LANDBANK.

Most often the brand image is influenced by the service quality. Still, marketing

plays an important role in raising brand awareness and it is why LANDBANK also

spend on advertising and other aspects of marketing. Visibility remains an

important concern of LANDBANK to expand their customer base while retaining its

existing customers. One of its marketing activities is coming up with Slogans

primarily to support sales branding and advertising activities. LANDBANK Slogans

throughout the years are as follows:

o Serving a Country on the Rise (1992–1994)

o The Countryside Unibank[5] (1994–2000)

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 o Interes Mo, Interes ng Bayan.[6](Your Interest, The Nation's

Interest) (2000–2004)

o Ang Bangkong May Damdaming Bayan (The Bank with a Nationalistic

Feeling) (2004–2014)

o We Help You Grow (2014–present)

However, its overall aim is to maximize profits by driving sales higher.

Sales

Sales is also an important function in the LANDBANK’s value chain which is

mainly because of LANDBANK’s remittance to the National Government. The bank

has continuously remitted high earnings to the government. In 2016, LANDBANK

has been cited as the highest cash dividend remitter to the government. On the

other hand, LANDBANK is highly competitive and apart from entering new markets

and finding new customers. LANDBANK also gives importance that it retains its

existing customers. The sales function of the bank serves a very important role at

this point where it does not just sell but also works at customer engagement and

retention.  Another important thing about LANDBANK’s sales is that it is the main

connecting point between the bank and the underserved and unbanked

customers. This function’s performance has an important effect on the bank’s

personality and image as banking in the countryside.

Product

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The products offered by the LANDBANK are also an important part of

LANDBANK’s value chain. From loans to deposits, LANDBANK provides several

kinds of products and services. However, in a banking context, rather than just

having a great product portfolio, it becomes impertinent for the LANDBANK to

provide great service to its priority sectors. LANDBANK provides a series of

specialized products and services, some of which are tangible and several

intangible to the underserved and unbanked.

Transactions

Another primary activity down LANDBANK’s value chain is transaction.

Technology has made this task easier and millions of transactions are carried out

everyday throughout the country and even other parts of the world, online and

offline. From ATMs to online payments, simply millions exchange hands in the

form of transactions. Variety of payment clearance systems and settlement

systems are used by banks globally. Some of them are ACH networks, ATMs,

bankcard networks and check clearing systems. Another method of transaction

prevalent in the LANDBANK is the internet/mobile banking system. While the debit

and credit cards have remained at the forefront of this growth in electronic

payments, mobile banking applications continue to rise and significantly improve

the bank’s e-banking services to futher support the bank’s directive towards ease

in doing business.

SUPPORT ACTIVITIES IN LANDBANK VALUE CHAIN

Technology

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The role of technology has grown increasingly important in LANDBANK.

Specifically, several of the most important developments have taken place during

the last two to three decades. Technology can also be a source of competitive

advantage for LANDBANK since it helps deliver services and be at par with the

competitors. Technology has made banking easier and also improved

LANDBANK’s productivity. Several of the services of LANDBANK can now be

availed of online and customers do not always need to go to the branch to receive

their services (loans, payments, inquiries and fund transfers).

Human Resources

Despite the growing role of technology human resources continue to play an

important role in the value chain of LANDBANK. Their importance in LANDBANK

is higher because it is part of the bank’s mandate to enhance and support its

employees.

Infrastructure

Infrastructure also plays a key role in LANDBANK. From physical infrastructure to

technology and particularly IT, infrastructure plays an important role in the growth

and functioning of LANDBANK. Due to increased competition, the importance of IT

in LANDBANK as well as the banking industry has grown tremendously.

Risk Management Guidelines

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At last banking is all about risk taking. Several of the inherent rewards in banking

are born of risks. Hence it is essential for the LANDBANK to properly manage their

risks, moreso due to its compliance in the law as a GOCC. Neither poorly

managed nor excessively managed risks are good for the health of the banks. Risk

management guidelines are therefore an important aspect in LANDBANK’s value

chain. It helps the bank managers to manage the risks, reduce or even eliminate

them as required.

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 Figure 17 – LANDBANK Service Value Chain

Service

Part of LANDBANK’s goals apart from pursuit of mandate and institutional viability

is the Customer service. Hence, a separate value chain for customer service was

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 crafted. As defined, customer service is the act of taking care of thecustomer's

needs and requirements by providing and delivering professional, helpful, quality

service and assistance before, during, and after the customer's requirements are

met. While to further explain LANDBANK’s customer service, it should be inserting

the word “Excellent”. Hence excellent customer service consists of exceeding

customers' expectations, surprising and delighting customers by going above and

beyond customer service standards and treating customers the way you would

love to be treated as a customer.

4.2 Internal Factor Evaluation (IFE) Matrix

Table 16 – IFE Matrix

WEIGHTED
KEY INTERNAL FACTORS WEIGHT RATING
SCORE
STRENGTHS
 Experienced management .15 3 .45
 Urban and rural presence (dual
.06 3 .18
function)
 Up-to-date electronic banking
.08 3 .24
services
 Strong support units in I.T. and
.12 4 .48
R&D
 High capitalization-Gov’t
depository bank (biggest provider of .25 4 1.00
loans to LGUs, SME, Govt.)
 Skilled workforce .08 4 .32
WEAKNESS
 Security in data assets .10 2 .20
 Less branches and ATMs in
.08 2 .16
malls/urban area
 Sound capital adequacy ratio (just
.04 1 .04
right)
 Slow Customer Service .04 2 .08
TOTAL 1.00 - 3.15
Ratings: 4=Major Strength, 3=Minor Strength, 2=Minor Weakness, 1=Major Weakness

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The Internal Factor Evaluation Matrix (IFE) provides LANDBANK’S strengths and

weakness which are rated whether such factors are major or minor strengths and

weaknesses. The rate of four suggests a major strength while three a minor strength.

As for weaknesses, a rate of one suggests a major weakness while the rate of two

implies a minor weakness.

According to the IFE Matrix, LANDBANK has three major strengths, which are its high

capitalization, strong IT support units, and experienced management. Based on

LANDBANK’S annual reports and financial statements, the firm’s financial performance

continues to improve over the years such as the 10% increase in Net Profits from 2017

to 2018 as well as its increased capital from P104.6 Billion in 2017 to P131.62 Billion in

2018. LANDBANK boasts its Technology Management Group as one of its support units

in providing for better service for longer periods of time to consumers. Also, experienced

management continuously leads LANDBANK to its overall growth.

Aside from its major strengths, LANDBANK’S skilled workforce, upgraded electronic

banking services and its dual function/presence urban and rural areas are considered

as its minor strengths.

While Security, being a major weakness, LANDBANK compensates through its Risk

Management Group to address situations on managing operational, credit and

reputational risks. It also addressed the security concern through investing in

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backup/updated systems that will allow operations to continue with limited disruption to

customer services.

Having mentioned security as one of LANDBANK’S weaknesses, there is also

LANDBANK’S weak presence in highly urbanized areas, slow customer service and a

stable capital adequacy ratio. A weak presence in highly urbanized areas like malls may

show that its marketing strategy is either ineffective or unfocused. LANDBANK has less

branches in the said areas which make its services unavailable in these places.

Lastly, given the fact the LANDBANK is managed by experienced bankers and

distinguished directors makes LANDBANK a well-supervised and managed banking and

financial institution. Moreover, its upgraded electronic banking services puts

LANDBANK at least a notch higher over its competitors who offer no such service

(Mobilock) or an underdeveloped electronic banking service. It puts LANDBANK in a

competitive stand over other banks. LANDBANK’S presence in other international

satellite offices makes its banking services available to a wider scope of clients, thus

providing more service which may equal to more profit. As well as its ties with

international sub-company such as Overseas Filipino Bank (OFBank) makes

LANDBANK open to more opportunities.

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 MODULE FIVE- STRATEGY FORMULATION

5.1 SWOT and TOWS Analysis

Table 17 – SWOT/TOWS Analysis

STRENGTHS WEAKNESSES
(S1) Experienced management (W1) Security in data assets
(S2) Urban and rural presence (dual (W2) Less branches and ATMs in
function) malls/urban area
(S3) Up-to-date electronic banking (W3) Sound capital adequacy ratio
services (W4) Slow customer service
SWOT/TOWS MATRIX
(S4) Strong support units in I.T. and
R&D
(S5) High capitalization-Gov’t
depository bank (biggest provider of
loans to LGUs, SME, Govt.)
(S6) Skilled workforce
OPPORTUNITIES SO STRATEGIES WO STRATEGIES
(O1) Rise in demand for 1. Improvement of both mobile 1. Acquire employees who will help
mobile banking applications applications and branch banking improve security measures (W1, O3)
(O2) Increase in loyal online system to increase number of multi- 2. Acquire competitor banks or
and multi-channel customers channel customers. (S3, S4, S5, smaller banks to increase equity
(O3) Harnessing mergers and O2) (W3, O3, O5)

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 acquisition to access the 2. Improvement of mobile banking 3. Use of improved mobile banking
talents needed applications. (S5, O1, O6) applications and amplified marketing
(O4) Boosts in loans to priority 3. Reach more markets with new strategies (W2, W4, O1)
sectors and improved services (S2, S4, S5,
(O5) Banking sector O4, O5, O6)
globalization 4. Provide better remittance service
(O6) Increase in strength and by innovating transfer system (S2,
profits from remittances from S4, S5, O6)
OFWS
THREATS ST STRATEGIES WT STRATEGIES
(T1) Bank switching due to 1. Improve security measures, data 1. Improve mobile banking and its
ATM system error protection and compliance (S3, S4, security (W1, T1, T3, T4)
(T2) Decrease in online, ATM S5, T1, T3, T4) 2. Acquaint employees with better
and branch usage due to rise 2. Amplify marketing strategies for and more efficient systems of service
in mobile payment (paymaya, other banking channels (S4, S5, T2) (W4, T3)
grabpay, gcash) 3. Amplify advertising for clients and
(T3) Possibility of abolition due investors to increase (W2, W3, T2)
to non-pursuance of bank
mandate
(T4) Vulnerability to security
breaches and attacks due to
increase in digital assets in
banking and financial
institutions

Based on the matrix above, the following strategies were generated; a) product

development through improvement of mobile banking applications and branch banking

system to increase number of multi-channel customers, improvement on security

measures, data protection and compliance, better customer service and increase

customer loyalty and increase profit; b) market development to target the unbanked and

underserved; c) market penetration through amplified marketing strategies to increase

urban area presence; and d) horizontal integration to increase equity and assets which

will in turn increase capital adequacy.

5.2 BCG Matrix

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This Matrix allows an organization to manage its portfolio to businesses by assessing its

relative market share position and the industry growth rate.

For LANDBANK’s business portfolio, the following are services/products which need

investments, harvesting (making money), divesting (reducing investment) and those

which needs to be completely taken out of the business portfolio.

Table 18 – BCG Matrix

LANDBANK’S GROWTH/SHARE MATRIX

Deposit Products (e.g. ATM Savings Auto-Save Deposit Account, Automated

Account, High Yield Savings Account, Time Tellering Machine, Cash Deposit Machine,

Deposit) Mobile Banking Application, LinkBiz Portal,

FCDU Products & Services Sikat-Saka

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 Insurance, Mortgage, Ancillary Products
Lending, Investment Banking, Trust

Products & Services, Treasury Products

 The stars in the LANDBANK’s Growth/Share Matrix are products that are always

at the start of the product lifecycle. The growth and market share are high because the

product is at the start of the product lifecycle, the margins are usually also high. Star

products can be the market leader though require ongoing investment to sustain. They

generate more ROI than other product categories like the various deposit products. The

strategy for this product must be aimed at gaining as much market share as possible.

An example of a product that can be classified as stars are the various LANDBANK

deposit products.

 Considered as question mark are those services still unknown if they will

become a star or will drop into the dog category in the future. These products often

require significant investment to push them into the star quadrant. The challenge is that

a lot of investment may be required to get a return. For example, MBA to reach its

maximum potential must have features that are user-friendly and reliable while ATMs

must be positioned to where clients usually transact businesses and must be available

24/7 to increase market share. It’s not always easy to spot the future star and this can

result in potentially wasted funds

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 Products or services that fall under cash cow category are those that typically

bring in far more money than it is needed to maintain the market share. These are

services that have been on the market for some time and are milked for cash that will

eventually be invested for question mark products/services

 Considered as Dogs in the in the BCG Matrix are products at the end of the

product lifecycle or products that have had to compete against the competition. The

margins are low, the market share is low and the market barely grows or even shrinks.

The company will no longer invest in marketing and eventually these products will no

longer be offered in the market.

 This BCG matrix analysis will help LANDBANK in deciding which entities in its

current business portfolio are actually profitable, which are duds, which should be a

priority and which will give a competitive advantage over others.

 Once established where a certain a product/service stand in the business

portfolio, LANDBANK will be able to know which product/services need investments,

which needs harvesting (making money), which needs divesting (reducing investment)

and which needs to be completely taken out of the business portfolio.

5.3 The Internal – External (IE) Matrix

Figure 18 – IE Matrix

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In the Internal Factor In the Internal Factor Evaluation (IFE) Matrix, LANDBANK

received a total weighted score of 3.15 which suggests that LANDBANK’s strengths are

capable of mitigating its weaknesses, thus making it one of the strongest and most

stable banks in the Philippines. While in its External Factor Evaluation (EFE) Matrix,

LANDBANK received a total weighted score of 3.11 which suggests that the external

environment of the industry and LANDBANK’s response to opportunities and threats are

strong.

Plotting these scores in the Internal-External (IE) Matrix, it appeared that such is plotted

in Cell I, the Grow and Build region. In such region, it suggests that the firm should

pursue intensive and vertical integration strategies such as market development,

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product development, market penetration, horizontal integration, backward integration

and forward integration strategies.

5.4 SPACE MATRIX

Table 19 – Space Matrix

Internal Strategic Position External Strategic Position
COMPETITIVE ADVANTAGE INDUSTRY STRENGTH
(-6 worst, -1 best) (+1 worst, +6 best)
-1 +5
As of July 2019, LANDBANK has a total of Cross selling and Up-selling activities such
401 branches and 2,117 automated teller as availing of various ATM products,
machines strategically located nationwide. -1 introduction of the LinkBiz Portal and Mobile
Banking App, continuous marketing of +6
Number of ATM cardholders also reached HYSA to GOCCs, GFIs and LGUs.
to 12,581,509 as of July, 2019. -2
Combined loans extended to the agriculture
sector, its mandated sector, which includes
agrarian reform beneficiaries and their
associations as well as small farmers, +5
LANDBANK has consistently belong to
reached *27.45% of the bank’s total loan
the top 5 banks in the country
portfolio of P799.64 billion as of June 30,
2019.

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 *exceeding the mandated 25% loan portfolios per
Agri-Agra Reform Credit Act for Banks
Strict compliance to various Regulations
and Mandates (e.g. COA, BSP, internal
audit)
Average -1.33 Average +5.33
Total axis X = 4
FINANCIAL STRENGTH (FS) ENVIRONMENTAL STABILITY(ES)
(+6 worst, +1 best) (-6 worst, -1 best)
The Bank’s net income grew by 10 +5 Technology (update/innovation) -2
percent from P14.1 billion in 2017 Inflation rate boomed at 5.2% for 2018 -3
Exceptional performance in 2018 with net +5 Competition among the banking industry
loan portfolio expanding significantly by Official depository bank of the Philippines -3
37% or more than P220 billion to reach
P840 billion -2
+6
Deposit base grew significantly by 17% to
reach P1.66 trillion from P1.42 trillion as
government and private sector deposits
increased. Capital also increased by 26%
to P131.62 billion from P104.6 billion for
2017.
Average 5.33 Average -2.5
Total axis Y= 2.83

Figure 19 – SPACE Matrix Graph

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LANDBANK’s directional vector is positioned in the aggressive vector (upper-right

quadrant) of the matrix, it shows that the company is in an outstanding position to utilize

its Internal Strengths (IS) to surmount internal weaknesses, obtain the advantage of

external opportunities, and evade external threats. As a result, product development,

market development, market penetration, and horizontal integration, can be employed,

depending on the particular environment that LANDBANK is focusing at the time.

5.5 The Grand Strategy Matrix (GSM)

Figure 20 - GSM

Rapid Market Growth

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  Market
Development
Q4  Market Penetration
 Product
Weak Competitive Position Development Strong Competitive Position
 Forward
Integration
 Backward

Q3 Q2

In the above illustration, Slow Market Growth LANDBANK is located in

Quadrant I. This entails that LANDBANK has a very strong

strategic position, determined in fulfilling its mandate to promote inclusive growth

especially to the unbanked and the underserved. This also means that LANDBANK has

an established competitive advantage and makes use of it as long as possible.

Strategies such as market penetration, market development, product development and

the vertical integration strategies are relevant for such firms positioned in Quadrant I.

With such position, it means that firms can afford to take advantage of external

opportunities and handle risks aggressively if necessary.

5.6 Summary of Strategic Formulation Tools

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 Table 20 – Summary of Strategic Formulation Tools
STRATEGIC FORMULATION TOOLS
TOW SPAC
STRATEGIES BCG IE GSM TOTAL
S E
Market Development      5
Market Penetration      5
Product Development      5
Horizontal Integration 3   3
Forward Integration   2
Backward Integration   2
Related
   3
Diversification
Unrelated
 1
Diversification

In sum, the most prevalent strategies that came up in the previous matrices presented,

market development, market penetration, product development garnered the highest

total. Related diversification closely followed. While vertical integration strategies and

unrelated diversification trained in the end.

5.7 The Quantitative Strategy Planning Matrix (QSPM)

From the above matrices presented, such had revealed several strategies that are

compatible with LANDBANK’S position in the industry. The QSPM indicates which of

these strategies are the best. It is to evaluate alternative strategies based on the

previously present internal and the external factors of LANDBANK.

Table 21 - QSPM

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 STRATEGIC ALTERNATIVES
Product
Market Market Horizontal
Developmen
Development Penetration Integration
t
Internal TA
W AS TAS AS TAS AS AS TAS
Strength S
Experienced
.15 - - - - - - - -
management
Urban and
rural presence .06 4 .24 1 .06 2 .12 3 .18
(dual function)
Up-to-date
online banking .08 - - - - - - - -
services
Strong support
units in I.T. .12 3 .36 3 .36 4 .48 3 .36
and R&D
High
capitalization-
Gov’t
depository
.25 4 1.00 3 .75 3 .75 4 1.00
bank (biggest
provider of
loans to LGUs,
SME, Govt.)
Skilled
.08 - - - - - - - -
Workforce
Internal TA
W AS TAS AS TAS AS AS TAS
Weakness S
Security in
.10 - - - - - - - -
data assets
Less branches
and ATMs in
.08 2 .16 4 .32 1 .08 3 .24
malls/urban
area
Sound capital
.04 3 .12 1 .04 2 .08 4 .16
adequacy ratio
Slow customer
.04 1 .04 1 .04 4 .16 1 .04
service
Total 1.00
TA
Opportunities W AS TAS AS TAS AS AS TAS
S
Rise in .20 2 .40 3 .60 4 .80 1 .20
demand for
mobile

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banking
applications
Increase in
loyal online
and multi- .12 1 .12 4 .48 2 .24 3 .36
channel
customers
Harnessing
mergers and
acquisition to .03 - - - - - - - -
access the
talents needed
Boosts in
loans to .05 2 .10 4 .20 3 .05 1 .05
priority sectors
Banking sector
.20 4 .80 2 .40 1 .20 3 .60
globalization
Increase in
strength and
profits from .10 - - - - - - - -
remittances
from OFWS
TA
Opportunities W AS TAS AS TAS AS AS TAS
S
Bank
switching due
.05 1 .05 3 .15 4 .20 1 .05
to ATM
system error
Decrease in
online, ATM
and branch
usage due to
rise in mobile .03 1 .03 2 .06 4 .16 3 .12
payment
(paymaya,
grabpay,
gcash)
Possibility of
abolition due
to non- .07 - - - - - - - -
pursuance of
bank mandate
Vulnerability to .15 1 .15 1 .15 4 .60 4 .60
security
breaches and

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 attacks due to
increase in
digital assets
in banking and
financial
institutions
Total 1.00
Total of Sum of
4.0
Attractiveness 3.57 3.69 3.96
2
Score
MODULE SIX - OBJECTIVES, STRATEGY RECOMMENDATIONS AND ACTION

PLANS

6.1 OBJECTIVES

Following the QSPM results, the area that is the most attractive to strategies compatible

in LANDBANK’s growth is the product development. The result is also in sync with

LANDBANK’s major programs listed under the 10-point Socio-Economic Agenda with

President Rodrigo Duterte, one of which is “Increasing Competitiveness and the Ease of

Doing Business”. Part of it jives with LANDBANK’s vision which is delivery of innovative

financial products and services powered by digital banking platforms and one of

LANDBANK’s business goal which is Excellent Customer Service.

To address the above, LANDBANK continues to expand its network to provide

additional channels for the populace in transacting business. This strategic

management paper aims to focus on the ease of doing business and excellent customer

service particularly in the ATM related transactions while continously increasing its net

income.

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6.1.1 STRATEGIC AND FINANCIAL OBJECTIVES

By relating LANDBANK’S Mission-Vision statement, External Factor Evaluation

(EFE) Matrix and Internal Factor Evaluation Matrix (EFE), the strategy that we will

apply is product development. Product development will improve LANDBANK

mobile banking application to be able to attain delivery of innovative products and

excellent customer services powered by digital platforms. Product development

will then translate the excellent service to increase in income and better bank

standing/reputation.

6.1.1.1 STRATEGIC OBJECTIVES

1. To invest in R & D / technology to improve the mobile banking application

on the start of year 2020.

2. To increase bank standing/reputation by implementing innovative

solutions in customer service through digital platforms by the end of year

2021.

3. To provide 100% reliable innovative product and services that would cater

clients specially the unbanked and the underserved upon implementation of

the enhanced mobile banking application by the end of year 2021.

4. To improve customer satisfaction by retaining 100% of the ATM card

holders through the 24/7 mobile banking application starting 2022.

Mobile Banking App and Beyond P a g e | 103

 5. To increase by 20% in market share or new acquired clients through the

24/7 mobile banking application starting 2022.

6.1.1.2 FINANCIAL OBJECTIVES

1. To continuously increase at least 10% on yearly income and additional 5%

starting 2022 upon implementation of the business strategies.

2. To belong to the top 5 in BSP ROE ranking through the improvement of

customer service via mobile banking application, which translates to more

clients transactions starting 2022.

3. To continuously belong to the top 3 ranking based on Assets, Deposits,

Capital and Loans by providing improved customer service through the

enhanced mobile banking application starting 2022.

6.2. STRATEGY RECOMMENDATIONS

6.2.1 BUSINESS STRATEGIES

Product Development

To realize the above strategic objectives, the paper recommends to use

technology to develop LANDBANK’s service pertaining to ATM related

transactions. This is to address its mission on the flawless delivery of services.

Using technological development to make transactions faster or more organized.

Mobile Banking App and Beyond P a g e | 104

LANDBANK has to keep in mind that quality service should be its priority so as to

meet its objectives. To facilitate this product development, LANDBANK must

capitalize on its strong support units in R&D and I.T. Departments. LANDBANK’s

high capitalization is also an indication that the company can afford such

development.

6.2.2 ORGANIZATIONAL STRATEGIES

The strategies would head no change in the organizational structure of

LANDBANK as to the top management. However, with the continuous

enhancement and development of systems, it is best to add personnel in some

units directly involved in the operation of the system.

6.2.2.1 MANAGEMENT

It is not necessary that LANDBANK should change it Board of Trustees.

LANDBANK has a good pool of talented managers. LANDBANK’s

management needs to be more involved and hands-on in the banking

operations to get to a deeper level of what the bank needs and in which

direction should the bank go. The managers should convene more often to

discuss the steps LANDBANK should take.

6.2.2.2 MARKETING

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With a growing market share due to the increase transactions from the

improvement of the mobile banking application, it means that the number of

clients served increase. With this said, there can be an increase in the

marketing for more prospective clients. LANDBANK then should amplify its

marketing strategies through a more dynamic, flexible and productive

Marketing Department. Such should be able to compete with the

aggressiveness of the competitors. More training for marketing managers are

advised.

6.2.2.3 ACCOUNTING AND FINANCE

The Finance Department should align itself with all the transactions and

movements LANDBANK is undertaking. It must be in support with

LANDBANK strategies. Being in the business of banking which is imbedded

with public interest and with its fiduciary nature, it is required that its

employees act with utmost diligence in the performance of their duties,

especially in the Finance Department. There is no drastic change to be done

by this department.

6.2.2.4 OPERATIONS

With many changes in the operations come 2022 and 2023 due to the

implementation of the strategies. It is required that the Operations

Department polish itself and align itself with the other departments to ensure

successful implementation. The Operations Department may need more

Mobile Banking App and Beyond P a g e | 106

employees seeing as that a larger market has to be served by LANDBANK

due to the improvement of the mobile banking application.

6.2.2.5. INFORMATION TECHNOLOGY

Investing in technology is one of the strategic objectives formulated. Thus, it

should be that LANDBANK’s I.T. Department is developed. It may be fitting

for LANDBANK to hire more I.T. Experts or to open a new unit in the

department to maintain and keep the system in optimum and running

condition. More funding is also probable to support the upgrade of the

department and its systems. A better security for digital assets and data is

also needed to support LANDBANK’s operation.

6.2.2.6. HUMAN RESOURCE

With the improvement of the mobile banking application and to be updated

with the continuous changes in the technology, it is implied that LANDBANK

needs to hire more employees to support its operations. In lieu with this, the

Human Resource (HR) Department must increase in competency and be

able to hire more talented employees for LANDBANK’s upgrading of

systems. The department should be more efficient and effective also in the

training of employees. However, with the additional venue to file complaints,

it is also possible to lessen the number of phone-bankers particularly in the

calls related to ATM transactions. Since most calls involve transaction

Mobile Banking App and Beyond P a g e | 107

 inquiry, the improvement of the system will significantly lessen the number of

client calls.

6.2.2.7. RESEARCH AND DEVELOPMENT

The R&D Department is the in-demand department during the

commencement of the implementation of the recommended strategies. This

means that to achieve better results and to aid in better research in the

market, operations, etc.; the R&D should be developed. More researchers

should be hired. There must also be better tools and equipment for efficient

gathering of data and better study. This department should not be

overlooked. A huge part of the data that LANDBANK managers are collected

by the R&D department.

6.3 ACTION PLANS

The following are the plans of action which will best achieve the above objectives:

Strategy 1

LANDBANK’s mobile banking application should be developed. Such application

should retain the basic transactions ready and available with a tap. The basic

transactions consist of the following:

o Mobile Banking – Transaction Inquiry (existing description only)

o Manage and monitor your savings and current deposit accounts

Mobile Banking App and Beyond P a g e | 108

o Check the balance of your LANDBANK Credit Card and Cash Card accounts

o View transaction history

o Transfer funds

o Bills Payment

o Basic Rates Inquiry

o ATM / Branch Locator

o Contact Numbers

o Electronic Payment Portal

o One-Time-Pin Generator

o Electronic Salary Loan

o Mobilock Facility

Aside from the above, the mobile banking application must be further developed

by enhancing and including the following:

1. Transaction inquiry containing not only the description of the transaction

(Inquiry/Withdrawal/Deposit/Fund Transfer/Purchase) but also all the pertinent

transaction details such as Date, Time, Amount, Source/Destination and ATM

Terminal/POS/Merchant)

Mobile Banking App and Beyond P a g e | 109

2. Fields to where the clients-users may file the complaints directly from the page

of the mobile application. It will enable the system to accurately tag the

complaints and forward the same to the units handling the transaction.

3. Fields to where the LANDBANK units-users handling the complaints may

accept monitor and respond directly to clients. This will enable the system to

update/tag the responses of the units-users so that the client-users may receive

it.

4. Reportorial and Back-up system which will enable the client/unit-users to view

and call-back transactions up to two years. (following the international standard

of accepting inquiry/complaints)

5. Data Security updates to secure international standards and eliminate breach of

confidentiality.

LBP Mobile Banking App

Existing Enhancement

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  Manage/monitor savings and  Detailed Transaction Inquiry

current deposit accounts  Targeted filing of complaints

 Check balance of Credit Card  Targeted tagging and resolution of

and Cash Card accounts complaints

 View transaction history up to 1  Real-time checking of updates and

month resolution of complaints

 Fund transfer  View transaction history up to 2

 Bills Payment years

 Data security updates

Strategy 2

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Aside from the mobile banking application or online services, LANDBANK must

use other technology to deliver its customer services. LANDBANK may also

acquire new Customer Assistance system to provide access to branches. Existing

Customer Assistance system can only be accessed by the phone-bankers and the

units accepting the complaints. However, LANDBANK branches who already

accepted complaints from clients may not access the Customer Assistance

system. It is either the branch personnel will call the phone-banker to file the

complaints or the branch instructs the clients to call the phone banker.

The new Customer Assistance system must have the following facilities:

1. Access of phone-bankers to accept, log and transfer the complaints to the

unit-users of the system.

2. Access of unit-users to accept, log and transfer/respond to the complaints

from either the branches or the phone-bankers.

3. Access of the branches-users to accept/file, log and transfer complaints from

clients to the phone-bankers or the unit-users of the system.

4. Reportorial and Back-up system which will enable the client/unit-users to

view and call-back transactions up to two years. (following the international

standard of accepting inquiry/complaints)

5. Data Security updates to secure international standards and eliminate breach

of confidentiality.

Mobile Banking App and Beyond P a g e | 112

 MODULE SEVEN – STRATEGY IMPLEMENTATION

7.1 STRATEGY MAP

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Below is a strategy map for product development wherein it is recommended that

LANDBANK should invest in R & D and technology to improve its mobile banking

application.

Figure 21 – Strategy Map

7.2 DEPARTMENTAL ACTION PLANS

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Below are the specific action plans which describes in details the order of activities,

expected output, corresponding timeline and the responsible departments.

STRATEGY 1 – ENHANCEMENT OF MOBILE BANKING APPLICATION

Table 22 – Departmental Action (Strategy 1)

STRATEGY 1
EXPECTED DEPARTMENT(S)
ACTIVITIES TIMETABLE
OUTPUT(S) RESPONSIBLE
Improving LANDBANK’s mobile banking application
Research on Canvass for software Cards & e-Banking
3 months
latest technology and systems that are Group - CeBG
(January
relevant to relevant to bank Technology
2020 to
banking and applications and Management Group –
March 2020)
security. security systems TMG
Convene Arrive at a decision
Information Technology
regarding on which systems 1 – 2 weeks
Committee - ITCOM
research results and software to (April 2020)
and developments purchase
Enhancement of the
Upgrade software 3-4 months ITCOM
software and systems
and systems (July-August Procurement
agreed upon by
agreed upon 2020) Department
management
Arrive at an enhanced
Integrate software
mobile banking
upgrade to 2 weeks
application that will
existing mobile (August TMG
meet market
banking 2020)
demands and if
application
possible, exceed.
Testing of mobile Test the application 3 months TMG and CeBG
application for and acquire reviews (October User Acceptance
LBP employees from users 2020) Testing (UAT) Team
Convene
Discuss the results of
regarding testing
the application, TMG and CeBG
results and 1 month
adjustments to be User Acceptance
possible (November
made and other Testing (UAT) Team
developments and 2020)
possible issues that
adjustments to be
may arise
made
Pilot The final testing of 1 month TMG and CeBG
Implementation of the application to all (December User Acceptance
the application for users and acquire 2020) Testing (UAT) Team

Mobile Banking App and Beyond P a g e | 115

 reviews for final
LBP employees
touches

Consolidation of Finalize application

TMG and CeBG
Findings from Pilot that is going to be
User Acceptance
Implementation ready for official
1 month Testing (UAT) Team
results and implementation and
(January
discuss address all issues for
2021)
adjustments need official release

Full Implementation of the

implementation of enhanced mobile February TMG and CeBG
the upgraded banking application 2021
application available for all clients

STRATEGY 2 – ACQUISITION OF NEW CUSTOMER ASSISTANCE SYSTEM

Table 23 – Departmental Action (Strategy 2)

STRATEGY 2
EXPECTED DEPARTMENT(S)
ACTIVITIES TIMETABLE
OUTPUT(S) RESPONSIBLE
Acquisition of New Customer Assistance System
Research on Canvass for software 3 months Cards & e-Banking
latest technology and systems that are (January Group - CeBG
relevant to relevant to bank 2020 to Technology

Mobile Banking App and Beyond P a g e | 116

 Management Group -
banking and applications and
March 2020) TMG
security. security systems
Convene Arrive at a decision
Information Technology
regarding on which systems 1 – 2 weeks
Committee - ITCOM
research results and software to (April 2020)
and developments purchase
Enhancement of the ITCOM
Upgrade software 3-4 months
software and systems Procurement
and systems (July-August
agreed upon by Department
agreed upon 2020)
management
Arrive at an enhanced
Integrate software
mobile banking
upgrade to 2 weeks
application that will
existing mobile (August TMG
meet market
banking 2020)
demands and if
application
possible, exceed.
TMG and CeBG
Testing of mobile Test the application 3 months
User Acceptance
application for and acquire reviews (October
Testing (UAT) Team
LBP employees from users 2020)
Convene
Discuss the results of
regarding testing
the application, TMG and CeBG
results and 1 month
adjustments to be User Acceptance
possible (November
made and other Testing (UAT) Team
developments and 2020)
possible issues that
adjustments to be
may arise
made
The final testing of 1 month
Pilot TMG and CeBG
the application to all (December
Implementation of User Acceptance
users and acquire 2020)
the application for Testing (UAT) Team
reviews for final
LBP employees
touches

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 Consolidation of Finalize application
TMG and CeBG
Findings from Pilot that is going to be
User Acceptance
Implementation ready for official
1 month Testing (UAT) Team
results and implementation and
(January
discuss address all issues for
2021)
adjustments need official release

Full Implementation of the

implementation of enhanced mobile February TMG and CeBG
the upgraded banking application 2021
application available for all clients

7.3 COST BENEFIT ANALYSIS

This analysis will illustrate the expected result from the implementation of the

improvement of the two strategies against its corresponding costs.

STRATEGY 1 – ENHANCEMENT OF MOBILE BANKING APPLICATION

Table 24 – Cost Benefit Analysis (Strategy 1) in million Pesos

  2020 2021 2022 2023 2024 2025

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 INCREASE
415.69 457.41 526.17 605.30 696.35 801.14
IN PROFIT
Transactional 414.91 456.40 524.86 603.59 694.13 798.25
Savings 0.78 1.01 1.31 1.71 2.22 2.89
EXPENSES 5.00 0.60 0.72 0.88 0.64 0.77
Research
and 5.00 0.20 0.20 0.20 0.20 0.20
Development
Procurement
  0.00 0.00 0.00 0.00 0.00
Cost
Maintenance
  0.40 0.52 0.68 0.44 0.57
Cost 3yrs
NET
Increase in 410.69 456.81 525.45 604.42 695.71 800.37
Profit

STRATEGY 2 – ACQUISITION OF NEW CUSTOMER ASSISTANCE SYSTEM

Table 25 – Cost Benefit Analysis (Strategy 2)

  2020 2021 2022 2023 2024 2025

INCREASE
335.54 369.17 424.62 488.41 561.79 646.22
IN PROFIT
Transactional 335.17 368.69 423.99 487.59 560.73 644.84
Savings 0.37 0.48 0.63 0.82 1.06 1.38
EXPENSES 5.00 15.60 0.72 0.88 0.64 0.77

Mobile Banking App and Beyond P a g e | 119

 Research
and 5.00 0.20 0.20 0.20 0.20 0.20
Development
Procurement
  15.00 0.00 0.00 0.00 0.00
Cost
Maintenance
  0.40 0.52 0.68 0.44 0.57
Cost 3yrs
NET
Increase in 330.54 353.57 423.90 487.53 561.15 645.45
Profit

The result of the Cost Benefit Analysis shows that the better strategy to choose is

Strategy 1. Enhancement of the mobile banking application will arrive at the most

number of strategic and financial objectives. Strategy 1 reflected higher increase in

profit, better customer service due to direct access of clients and increase in bank

standing/reputation due to its innovation and ease in doing business.

7.4. FINANCIAL PROJECTIONS

With the recommended strategies being mentioned, such will aid in the achievement of

the stated strategic and financial strategies. The implementation of the strategies will

translate to a change in the finances of LANDBANK. The following are the financial

projections for LANDBANK following the strategies and fulfillment of the stated

objectives:

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7.4.1. Statement of Income
Table 26 – Statement of Income (Actual and Projected)

STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 2018
AND PROJECTED FOR DECEMBER 2019-2023
(amounts in Billion of Philippine Pesos)
  Actual Projected
  2018 2019 2020 2021 2022 2023
Interest Income 60.68 66.75 73.42 80.77 92.88 106.81
Interest Expense -14.09 -14.09 -14.09 -14.09 -14.09 -14.09
Net Interest
46.59 52.66 59.33 66.68 78.79 92.72
Income
Provision for
-4.30 -4.30 -4.30 -4.30 -4.30 -4.30
Credit Losses
Net Interest
Income after 42.29 48.36 55.03 62.38 74.49 88.42
Credit Losses
Other Operating
7.67 8.44 9.28 10.21 11.74 13.50
Income
Other Operating
-33.53 -36.88 -44.26 -53.11 -58.42 -64.26
Expenses
Profit before Tax 16.43 19.91 20.05 19.47 27.81 37.66
Tax Expense -0.25 -0.30 -0.30 -0.29 -0.42 -0.56
Net Profit 16.68 20.21 20.35 19.76 28.22 38.22

Based from the above data, LANDBANK’s Projected Statement of Income is

continuously increasing while maintaining expenses except during the years 2020 and

2021 when the operating expenses increased by 15% which is justified by the additional

cost of R & D and the I.T. improvements. The projected income statement reflects its

compliance with the objectives formulated reflected in the continuously increasing

income by 10% and additional 5% at the start of 2022. Moreover, the statement above

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reflects the result or income from the implementation of the recommended business

strategies.

7.4.2. Statement of Financial Position

Table 27 – Statement of Financial Position (Actual and Projected)

STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED DECEMBER 2018
AND PROJECTED FOR DECEMBER 2019-2023
(amounts in Billion of Philippine Pesos)
  Actual Projected
2019 2020 2021 2022 2023
(Increas (Increas (Increas
  2018 (Increase (Increase
e by e by e by
by 10%) by 15%)*
10%) 10%) 15%)*
Total Assets 1.889 2.078 2.286 2.514 2.766 3.042
Total Liabilities 1,752 1927 2120 2332 2565 2822
Total
Stockholders’ 137 151 166 182 201 221
Equity
Total Liabilities
1889 2078 2286 2514 2766 3042
and Equity
 

The Statement of Financial Position also reflected the 10% continuous increase up to

year 2021 and additional 5% starting 2022 in the income which was translated to the

corresponding increase in the Total Assets. The yearly increase is due to the increase

in income from increase in transactions which were the result of the implementation of

the improvement in the mobile banking application. This means more clients can access

LANDBANK’S services and it also translates to a flawless delivery of services. It

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satisfies further, the formulated strategy which is to improve its mobile banking

application.

7.4.2.1 Statement of Financial Highlights

Table 28 – Statement of Financial Highlights (Actual and Projected)

Financial Highlights (in Billion PHP)

  Actual Projected
  2018 2019 2020 2021 2022 2023
2,870.4
Asset 2,208.00 1,840.10 1,672.80 1,241.50 1,097.30
0
Net Profit 16.68 20.21 20.35 19.76 28.22 38.22
Operating
-33.53 -36.88 -44.26 -53.11 -58.42 -64.26
Expenses
Equity 137 151 166 182 201 221
*Projected amounts based on 7.4.1 and 7.4.2 respectively.

In the above table, it can be seen that all financial statements projected were according

to the financial objectives set. The Net Profit, Total Asset and Equity increase from the

actual baseline year 2018. All amounts were found increasing accordingly.

MODULE EIGHT – STRATEGY EVALUATION, MONITORING AND CONTROL

Table 29 – Balanced Scorecard

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 STRATEGY
ASPECTS
OBJECTIVES MEASURES TARGETS INITIATIVES
Increasing
Adhere to PH
SOCIO- Prioritization to Competitiveness and
President's Socio
ECONOMIC unbanked and 100% the Ease of Doing
Economic
IMPACT underserved Business
Agenda
Increase in ATM
related transactions
through improved
Increase Increase in mobile banking
FINANCIAL 15%
profitability Profit application to
generate additional
profit.
Improved customer
24/7 Access in
service through
mobile banking
Improve access of mobile
application to
STAKEHOLDER customer 100% banking application
address
experience in transaction
inquiries and
inquiries and
complaints
complaints handling
Savings resulting to
decrease in
INTERNAL Improve Decrease in Manpower due to
BUSINESS operational Operating 10% less calls and queries
PROCESSES efficiency expenses and operating cost of
handling queries and
complaints
Keep employees
Provide various
updated on the
trainings to keep the
Bank’s products
Number of employees updated
and services.
LEARNING & hours spent on At least 40 not only on the
Further, keep
GROWTH various hours/year Bank's products and
the bank
trainings services but also to
updated to
the technological
technological
advancements.
advancements.

The above matrix shows objectives of LANDBANK to monitor performance by using

scorecards measured using performance targets. In its Socio-Economic target,

LANDBANK aims to abide 100% to the mandate of our government headed by our

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President. Financially, LANDBANK plans to increase by 20% in its income to also

relatively increase other financial ratios to achieve the banks business goals. As to

Stakeholders, LANDBANK will be strict to provide 24/7 access to the mobile banking

application to cater client queries and customer complaints. In the Internal Process,

decrease in the operating expense is targeted to be 10%. Finally, in the Learning and

Growth, a target of at least 40 training hours is needed to be able to provide knowledge

and expertise to the employees which will enable them to be updated to the bank

products and services as well as the various technological advancements.

MODULE NINE - CONCLUSION

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Banks in the Philippines have all the necessary tools and a supportive regulatory

environment to lead the country into a new era of digital banking. The president of our

country nonetheless is very supportive to the banking industry’s adaption to digital

technology.

Moreover, LANDBANK’s president has also shown positive remarks on the bank’s

adaptation to digital technology. As already stated in LANDBANK’s vision, “By 2023,

LANDBANK shall be the leading universal bank that promotes inclusive growth,

especially in the unbanked and underserved areas, through the delivery of innovative

financial products and services powered by digital banking platforms.”

Hence, LANDBANK has to start this journey and exploit the opportunities, to focus on

and invest in the digital strategy, which should involve not only technology, but also

processes and organizational reengineering.

Indeed, enhancement of LANDBANK’s mobile banking application is a strategy towards

achieving the bank’s vision. Thus, it will enable LANDBANK to be in sync with it’s digital

initiative in order to (1) attain better customer service due to its convenience and

availability; (2) increase in income and bank savings due to increase in ATM related

transactions and decrease in labor cost to accommodate client inquiries/complaints,

respectively, and (3) increase bank branding due to its innovation and strengthen bank

reputation due to its reliability.

BIBILIOGRAPHY

Mobile Banking App and Beyond P a g e | 126

1. Baxter, M., & Vater, D. (2013). Building the retail bank of the future. Boston,

Massachusetts: Bain & Company.

2. Baxter, M., Berez, S., & Padmanabhan, V. (2013). Rebooting IT: Why financial

institutions need a new technology model. Boston, Massachusetts: Bain &

Company.

3. Ali, S., Dixon, J., & Padmanabhan, V. (2014). Why cybersecurity is a strategic

issue. Boston, Massachusetts: Bain & Company.

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