In a world increasingly defined by digital convenience and shifting consumer behaviors, the thrift banking industry finds itself at a pivotal crossroad. The sector, long known for its deep community roots and customer-centric approach, is now stepping boldly into a hybrid future that merges traditional brick-and-mortar service with cutting-edge digital platforms.
This year’s theme for the Chamber of Thrift Banks (CTB)’s convention, “Resilience in Hybrid Banking,” captures this evolution. It is not merely about adapting to technology. It is about reimagining resilience itself: building intelligent, flexible systems that anticipate change, meet rising expectations and keep customers at the very center wherever they are.
CTB convention co-chair and Citystate Savings Bank president Jaime Valentin Araneta said that hybrid banking is the convergence of in-branch and digital services for a client-centric ecosystem.
“Through this blend of traditional and electronic banking, customers have the best of both worlds in choosing and using their preferred channel or platform to meet their credit, savings, investment and other banking needs,” Araneta said.
“CTB chose hybrid banking as our key convention theme as it reflects where our member banks are operating: presently, directly or aspirationally.”
For thrift banks, this shift isn’t theoretical—it’s happening now. Customers can now apply for loans, pay bills and transfer funds through mobile or online platforms 24/7.
While digital natives such as Gen Z and millennials have long embraced this, the pandemic nudged middle-aged and older clients into the digital fold, which created a broader, more digitally fluent customer base.
That shift, Araneta said, has helped the Bangko Sentral ng Pilipinas (BSP) achieve its key goals of digitizing 50 percent of all retail payments and onboarding 70% of Filipino adults into the formal financial system.
Asked about the key trends driving the transformation of thrift banks in 2025, Araneta noted that the fintech landscape is becoming increasingly saturated, with many solution providers already aligned with large universal, commercial or digital banks.
This has prompted smaller players to explore alternative strategies such as leveraging low-code development tools to design and roll out more customized products and services.
However, Araneta acknowledged that the abundance of third-party vendors along with the high costs of implementation remains a significant challenge.
“More information-sharing and cross-referrals based on actual, successful implementations or rollouts would be an immense help to banks about to embark on their own digital transformation journeys,” Araneta said.
If the future of banking lies in smarter, faster and more adaptive service, then CTB members are well on their way.
CTB convention co-chair and president of BPI Direct BanKo Rodolfo Mabiasen Jr., said the sector is embracing artificial intelligence (AI) and machine learning for credit scoring, fraud detection and customer profiling.
“With the advent of AI, machine learning and quantum computing, we can profile our customers and understand their needs better and better, for more tailored banking solutions,” Mabiasen said.
Routine banking tasks like deposits, withdrawals and loan applications are also increasingly becoming digital-first.
“Transaction processing costs of digital are just a third or less than if done via ATM or over-the-counter,” he said, noting that automation has improved employee productivity and customer satisfaction.
Importantly, CTB envisions a more inclusive tech ecosystem. In the era of open finance, Mabiasen anticipates multi-tenant, subscription-based platforms that “democratize participation” for smaller banks, enabling them to share costs and scale more affordably.
Facing forward: Risk and resilience
But as digital adoption accelerates, so does the need for proactive risk management. Araneta emphasized the importance of enterprise risk management (ERM) that spans all digital and physical channels.
“ERM must be seamless and real-time,” he said, citing the BSP’s new rules under the Anti-Financial Account Scamming Act (AFASA), which took effect on June 25.
The new guidelines require advanced fraud management systems (FMS) for banks with electronic services exceeding P75 million in monthly value. These systems must detect behavioral anomalies, monitor geolocation and flag mobile or account changes in real-time.
These are essential defenses in a world where phishing and financial fraud grow more sophisticated by the day.
Resilience also means preparing for broader systemic threats like economic shocks, cyberattacks and climate-related risks.
“Thrift banks calibrate their borrower risk acceptance criteria and scoring models in response to, or in anticipation of any potential loan repayment risk wrought by both macro and micro economic headwinds. Banks are also strengthening their data privacy and cybersecurity with the help of big tech and fintech solutions,” Araneta explained.
Despite the sector’s growing technological prowess, CTB leaders insist that the mission of thrift banks remains rooted in accessibility.
“Digital transformation, albeit in a hybrid model, is an existential imperative,” said Mabiasen. “It matters not just for financial inclusion of the underbanked, but even for asset management and wealth banking.”
This hybrid approach where digital meets physical allows thrift banks to continue serving rural and underserved communities where banking presence remains sparse, but connectivity is growing.
With greater competition from big tech and fintechs entering the scene, Mabiasen expects costs for innovation to fall, making digital transformation more feasible for mid-sized banks.
Charting the course ahead
So, what does the next five years look like for the industry?
CTB president Mary Jane Perreras, who also serves as vice chairperson of CARD SME Bank, believes the future lies in convergence.
“Wider digital adoption and vendor competition will drive down the costs of mobile, online and cloud-native core banking systems. But brick-and-mortar community presence remains essential,” Perreras said. “Together, they form the best of both worlds.”
Perreras praised ongoing efforts by regulators for creating robust frameworks.
She pointed to the 2024–2029 Financial Services Cyber Resilience Plan as a landmark policy that will support innovation while safeguarding trust.
Looking further ahead, Perreras anticipates more regulatory clarity on crypto, stablecoins and even non-fungible tokens, which are emerging assets that are slowly gaining traction.
Her final message was clear and confident: “We are committed to upholding the highest standards of governance, credit discipline and customer experience while judiciously adopting and applying the latest technological breakthroughs in generative AI, machine learning and quantum computing for the ultimate benefit and security of our precious customers.”
According to Perreras, the thrift banking industry aims to be the sweet spot of hi-tech and hi-touch, physical and digital, convenient and secure.
“This is how we intend to stay relevant and preferred,” she said.
As of end-2024, the thrift banking sector posted total assets of P1.1 trillion, 6% higher than the previous year. Lending activities grew significantly, with core loan portfolios expanding by 14.7% to P777.28 billion. The non-performing loan ratio stood at 6.67%.
Deposit liabilities also inched up by 4.7% to P826 billion, reflecting continued public trust. The sector maintained a healthy capital base of P174 billion, with a capital adequacy ratio of 17.9%, well above regulatory requirements.
As thrift banks charge into the future, one thing remains constant: their resilience.
But in 2025, resilience is no longer just about weathering storms. It’s about intelligent adaptation and staying close to customers while staying ahead of change.
In this hybrid world where screens and storefronts coexist, thrift banks are not just surviving. They are reengineering what it means to thrive.
Editor’s Note: This press release for Chamber of Thrift Banks is not covered by Philstar.com’s editorial guidelines.