What's Happening?
A report by Twimbit, titled 'State of CX in ASEAN,' indicates that traditional banks in the Philippines are falling behind their digital counterparts and ASEAN peers in advanced capabilities and customer experience. The report, published in October 2026,
highlights that while some traditional banks like Bank of Philippine Islands (BPI) and Union digital Bank show advanced features such as AI insight and biometric authentication, many others offer only basic personalization and SMS one-time passwords. Customer feedback consistently points to slow case resolution, difficulty in reaching human agents, and inadequate follow-through on logged issues. In contrast, digital banks in the country are noted for their advanced biometric authentication, AI-powered financial services, personalized offers, and fully digital onboarding processes, often combining in-app support with conversational AI and human assistance. GoTyme Bank led in overall customer experience with a score of 4.06 out of 5, while UnionBank topped traditional banks with a score of 4.03.
Why It's Important?
This disparity in digital capabilities and customer service between traditional and digital banks in the Philippines has significant implications for the banking sector and consumers. Traditional banks risk losing market share and customer loyalty if they do not adapt to evolving customer expectations for seamless digital experiences and efficient service. The struggle to resolve cases quickly and provide accessible human support can lead to customer frustration and a shift towards more agile digital platforms. For U.S. financial institutions with operations or partnerships in the ASEAN region, this trend underscores the importance of investing in advanced technology and customer experience strategies to remain competitive. The success of digital banks in integrating AI and biometric authentication sets a benchmark that traditional banks, both in the Philippines and potentially globally, will need to meet to stay relevant in an increasingly digital-first financial landscape.
What's Next?
To address these shortcomings, Twimbit suggests that improving service responsiveness and consistency, alongside strengthening employee enablement, will be crucial for traditional Philippine banks to deliver a more cohesive customer experience. This likely involves significant investment in technology upgrades, staff training, and process re-engineering to integrate AI-powered solutions and enhance digital channels. Banks may also explore partnerships with fintech companies to accelerate their digital transformation. The competitive pressure from digital banks, which are rapidly advancing in areas like biometric authentication and AI-powered financial services, will likely drive traditional institutions to prioritize these improvements. Failure to adapt could result in further erosion of their customer base and a widening gap in service quality, potentially leading to regulatory scrutiny regarding consumer protection and access to efficient banking services.
Beyond the Headlines
The findings from the Twimbit report reflect a broader global trend where traditional industries are grappling with the rapid pace of digital innovation. Beyond operational efficiency, the ethical implications of AI integration in banking, particularly concerning data privacy and algorithmic bias, will become increasingly important. As banks rely more on AI for personalized offers and customer interactions, ensuring transparency and fairness in these systems will be paramount. Furthermore, the difficulty in reaching human agents highlights a potential dehumanization of banking services, raising questions about the balance between automation and personalized human interaction. The long-term shift could see a hybrid banking model emerge, where digital efficiency is complemented by accessible and empathetic human support for complex issues, redefining the very nature of customer relationships in the financial sector.
