I.

BACKGROUND

Case Summary

This study provides information about the Bank of the Philippines Islands (BPI),
conducts an analysis of the factors that can affect the bank, reveals the bank's
strengths and weaknesses, and assesses the impact of opportunities and threats on
the bank's current position. It also includes the approaches that were used to weigh
all of these factors, in addition to the proposed strategies, which are the focus of this
study.

The Bank of the Philippine Islands, which has been around for 168 years, was the
first bank in the Philippines and Southeast Asia. It has 8.7 million customers and is
licensed by the Bangko Sentral ng Pilipinas to offer universal banking services. The
Bank gives trustworthy advice and financial services that meet the needs of its wide
range of retail and business clients. These clients include self-employed micro-
entrepreneurs, overseas Filipinos and their beneficiaries, small and medium
businesses, domestic conglomerates, and multinational corporations. BPI has one of
the largest physical and digital distribution networks in the world. It has 1,167
branches and branch-lite units, three international offices, and 2,822 ATMs and Cash
Accept Machines (CAMs) all over the country. The Bank is a leader and innovator in
the use of digital channels, and it is a major provider of financial services for retail
clients through internet banking (via BPI Online at www.bpi.com.ph) and mobile
banking (via the BPI Mobile app) and for corporate clients through Bizlink.

In addition to its banking products and services, BPI has built up a strong non-life
insurance business, mostly through its subsidiary BPI/MS Insurance Corporation.
The Philippines conglomerate Ayala Corporation has long controlled most of BPI,
which is traded on the Philippines Stock Exchange.

Company Overview

The Bank of the Philippine Islands (BPI) is a commercial bank that has a license to
do more than just commercial banking. BPI and its subsidiaries offer a wide range of
financial services, including corporate banking, consumer banking, lending,
investment banking, asset management, securities distribution, insurance services,
leasing, and foreign exchange. These services are available to a wide range of
clients, including large corporations, government agencies, small and medium-sized
businesses, and individuals.

The bank was the first one to be set up in the Philippines. It was the one that started
the banking and finance industry in the country. It did a lot of things that made it the
de facto central bank of the country, like printing and issuing money in its own name.

After it opened, BPI was the only commercial bank in the Philippines for a long time.
On January 1, 1912, it got the name it has now. BPI had become a genius of its
environment because it was one of the first companies in its field in the Philippines. It
quickly adapts to new technologies, comes up with new ideas, and always tries to
"Make the Best Happen," which is its slogan. As it grows and becomes one of the
best banks in the Philippines and the world, they sometimes don't mind that it still
has problems. One of the BPI's problems is that it needs more workers to help more
clients at once. The other problem is that there need to be more seats for people to
sit on while they wait for their turn.

Today, BPI is known not only as the oldest bank in the Philippines and Southeast
Asia but also as a leader in Philippine banking, thanks to its high market
capitalization, strong Tier 1 capital adequacy ratio, and healthy shareholder return,
all of which are supported by wise management. Moody's Investors Service and
Fitch Ratings, both international rating services, have given BPI an investment-grade
rating.

As of December 2013, BPI has 814 branches all over the country. This includes 66
kiosks and nine branches outside of the country. While BPI's ExpressNet network of
ATMs has a total of 2,507 terminals that serve customers all over the country.

Company History

On August 1, 1851, BPI was founded as "El Banco Espaol Filipino de Isabel II,"
which means "The Spanish-Filipino Bank of Isabel II." It was named after Queen
Isabella II of Spain, who was King Ferdinand VII's daughter. It was the first bank run
by the government in the Philippines, and it was the third Philippine Bank during the
time of the Spanish. At the time, José Joaqun de Ynchausti of Ynchausti y Ca, a
well-known Philippine multinational conglomerate, was one of the founders and the
main shareholder. He also started the Tanduay Distillery and built the Puente
Colgante. From 1868 to 1873 and 1876 to 1884, José was in charge of the bank.

After Isabella II was overthrown in a revolution on September 3, 1869, the bank's

name was changed to Banco Espaol-Filipino. After finding out that Intramuros was
becoming "economically inactive," the bank moved from the Royal Custom House in
Intramuros to the new business district of Binondo in January 1892. It moved to 4
Plaza Cervantes, near the corner of Juan Luna Street, which at the time was a prime
piece of property owned by the Dominican friars.

On March 15, 1897, Banco Espaol-Filipino opened its first branch outside of Manila.
It was in the city of Iloilo. But the idea of opening branches outside of Manila was
thought of as early as the 1850s. The first branch was supposed to be in Bacolor,
which was the capital of Pampanga at the time. But by that time, Iloilo and other
provinces in Panay were producing more sugar than Pampanga, so the first branch
was opened in Iloilo.

The shareholders of Banco Espaol-Filipino decided to change the name of the bank
on January 1, 1912. The new name was Bank of the Philippine Islands (BPI), or
Banco de las Islas Filipinas in Spanish. Republic Act No. 1790, which was passed on
October 12, 1907, was the reason for the name change. This law said that the bank
could change its name. During the time when the United States was still a colony,
the bank was also made private.

When the Central Bank of the Philippines (now called Bangko Sentral ng Pilipinas)
was set up in 1949, BPI lost the right to make Philippine pesos, which it had had
since the Spanish colonial era and continued to have during the American colonial
era.

On December 31, 1969, Ayala Corporation, which had been working with BPI since it
was founded in 1851, bought most of the company's shares. This made BPI the most
important of Ayala's financial businesses.
In 1851, became the company's biggest shareholder. Over time, he turned BPI into
the most important of Ayala's financial businesses. However In the 1970s, BPI was a
part of a lot of mergers and purchases. The first one happened

When BPI bought the People's Bank and Trust Company in 1974. Commercial Bank
and Trust Company in 1981, CityTrust Banking Corporation in 1996, Far East Bank
and Trust Company in 2000, Prudential Bank in 2005, and BPI Family Savings Bank,
which is a subsidiary of BPI, in early 2022 are all examples of large, well-known
acquisitions.

In 1982, BPI became a universal bank. In 2000, it bought the insurance companies
of the Ayala Corporation, which is the parent company of the Ayala Corporation. This
made it the first bank in the Philippines to offer insurance services. In the same year,
BPI also opened an Internet bank called BPI Direct Savings Bank.

On February 14, 1986, BPI set up Expressnet, its own network between banks.

The "Make the Best Things Happen" campaign was started by BPI in October 2015.

BPI will begin building its new headquarters in Makati in the second quarter of 2019.
Skidmore, Owings & Merrill has been hired by BPI to design it. To make room for the
new building, the old building will be torn down.

In August 2019, BPI introduced a new logo and slogan, "Ready Today, Ready
Tomorrow."

Business Model and Operations

Bank of the Philippine Islands (BPI) provides customers with a comprehensive

selection of banking services and other financial solutions. It offers checking and
savings accounts, time deposits, debit, credit, and prepaid cards, corporate credit
cards, auto loans, personal loans, housing loans, and business loans, among other
financial products and services. In addition, the financial institution provides clients
with investment money as well as life, non-life, and pre-need insurance. Bills
payment, money transfers, foreign exchange, asset management, stock brokering,
mobile and online banking, leasing, trade financing, and cash management are
some of the services that are included in its array of offerings. Through its subsidiary,
BPI Capital Corporation, BPI provides investment banking services to its clients.
These services include loan syndication, project finance, equity underwriting, issue
management, book-running, and syndication and advisory services related to the
raising of debt for acquisitions and the refinancing of existing debt, as well as
mergers and acquisitions. Customers can get banking services at any of the bank's
branches, micro banking offices, or automated teller machines. It is present in Hong
Kong, the United Kingdom, the United States of America, and the Philippines. The
corporate headquarters of BPI is located in Makati City, which is inside Metro Manila
in the Philippines.

II. VISION FRAMEWORK

Core Values

BPI intended to spread to the clients that they were NICE, which stands for;
Nurturing, Integrity, Customer Obsessed, and Excellence. A key goal of BPI is to
show its customers that it cares about its business and acts with transparency and
respect. Taking care of customers' needs is what BPI does best. BPI anticipate their
needs, provides the best solutions and does the job in a team-oriented manner.

Core Purpose

The Bank of the Philippine Islands aims to build a better Philippines by serving and
guiding clients to the best of their abilities so that they may achieve their financial
goals.

BPI Goal

BPI anticipates itself as a trusted financial partner, and with the company's
knowledge and expertise, it will ensure that clients' futures are nurtured and eased.
Vivid Descriptions
BPI aims to address and understand clients' financial needs since they foresee them
as their first responsibility. The BPI strives to be the employer of choice among other
Philippines financial associations by fostering a culture of mutual respect,
meritocracy, performance, and teamwork. Since the company is committed to
integrity, professionalism, and loyalty, it hires the best people for the job to ensure
the highest quality of service.

III. PROBLEM STATEMENT

What Strategies Should BPI implement to Cope up with COVID 19

Pandemic?

IV. AREAS OF CONSIDERATION

Point of View

-The case will be examined from the point of view of the management team of the
Bank of the Philippine Islands (BPI).

Time Frame

-The case covered 1851 to 2021, when the association of the Bank of the Philippine
Islands was founded. We assume the time frame is from 2020 to present.
V. STRATEGIC GOALS AND OBJECTIVES

Strategic Objectives

- To increase the 3.2 million active users of BPI Online and Mobile app (at least
attract the remaining BPI clients who do not introduce yet in online banking)
by intensely focusing on banking digitalization.
- To maintain and increase funding for sustainable development through
business activities that promote economic, environmental, and social goals.
- To reach the three million total assets by 2023 to become the ranked two
banks in the Philippines.

Social Objectives

- Assisting its clients and society at large in achieving financial independence.

- Increasing the sustainability of the environment.
- To contribute to nation-building in an inclusive and responsible manner.

VI. EXTERNAL ANALYSIS

PESTEL Analysis

PESTEL Analysis was used to analyze the macro environment that has an
impact on the industry. It is a tool to examine the Political, Economic, Social,
Technological, Environmental, and Legal factors in the external environment.
Potential Changes in the future Effects on Level of Opportunit
Barriers, Effects y/
Macro Environment Determinant on Five
s & Factors Threat
(threat of Forces of
new entrant, Competiti
threat of on
substitutes,
intensity of (High,
rivalry, Moderate,
bargaining Low)
power of
buyer,
bargaining
power of
supplier?
POLITICAL
Republic Act No. 10641 Threat of High Opportunity
New Entry
An act allowing the full entry of foreign
banks in the Philippines, amending for
the purpose Republic Act No. 7721
 This law seeks to liberalize
further the entry of foreign banks
into the country to create a more
competitive banking industry
and attract more foreign direct
investment. This will raise the
efficiency level of banks through
adopting new technology and
enhancing human capital skills,
reducing operating costs, and
institutionalizing corporate
governance structure reforms,
which will benefit the investing
or depositing public.
ECONOMIC
Inflation Rate Threat of Moderate Threat
 According to PSA, the country's Substitute
inflation in November 2022
surged further to 8.0 percent
from 7.7 percent in October
2022. The fluctuating inflation
rate greatly affected banks'
interest rates as well as the
decision of people in choosing
the best bank to save and their
assets.
Population Growth Bargaining Low Opportunity
 The current population of the Power of
Philippines is 113,134,196 as of
December 2022 (Philippines Buyer
Population, 2022). The rise in
population growth is an indicator
that the company needs to
enhance and value its offerings
to provide better services to its
clients.
Unemployment Rate Intensity of Low Threat
 According to PSA, there were Rivalry
2.68 million unemployed people
in August 2022 compared to
2.60 million in July 2022,
registering a rise of 78.64
thousand. An increase in the
unemployment rate can be
translated into an increase in
non-performing loans, reducing
bank liquidity.
SOCIO-CULTURAL
The population and businesses are Intensity of Moderate Opportunity
becoming more digital friendly Rivalry
 Due to the community
quarantine regulations imposed
by the government to stop the
virus' spread, the latest
pandemic has significantly
increased the amount of time
Filipinos spend online
conducting transactions. Filipino
internet users are divided into
two segments in spending their
time using the internet. First is
the social media users, which
accumulate more Filipino
internet users time than Filipino
online shoppers. But Filipino
online shoppers are still many.
Given that most people are
already internet knowledgeable
and utilizing the internet to buy
goods and services, these
developments suggest that
digital payments have a
significant chance of becoming
the default payment method.
The health and safety of employees Bargaining Low Threat
are threatened by Covid-19. Power of
 The health and safety of the
employees are the factors to Supplier
consider in operating the
business. People in the bank
are exposed to each other and
need contact for communication.
However, Covid-19 came into
the scenario and became a
threat to the health and safety of
the employees. With that, the
employees become worried
about themselves and therefore
limit their space at work. To
prevent the spread of Covid-19
to people, on the other hand,
the government imposes a
lockdown that delays the
economic activity of different
sectors, including banks. This
lockdown creates layer upon
layer of problems, including
losses of jobs and incomes of
people, and therefore becomes
 unable to pay loans, making
banks lose revenues.
TECHNOLOGICAL
Information Technology Threat of High Opportunity
 Technological advancements Substitute
have led to new market
opportunities, products and
services, and more efficient
delivery channels in the banking
industry. Some of these are
electronic banking, mobile
banking, and internet banking.
Recent financial sector reforms
aimed at improving the speed
and reliability of financial
operations, as well as initiatives
to strengthen the banking
sector, have been built around
information technology.
The rise in traditional banks to provide Intensity of High Opportunity
more digital offerings and adopt fintech Rivalry
promoted by BSP and necessitated by
the pandemic.
 The Philippines’ Bangko Sentral
ng Pilipinas’ (BSP) and the
Philippines' government have
been pushing for the
digitalization of infrastructure
and industries throughout the
country. This push for
digitalization was accelerated
due to the pandemic. BSP aims
to have a digitally heavy
economy and expects that the
use of digital platforms for
payments will continue to rise.
According to the BSP, 50% or
half of all transactions should be
digitized by 2023, and 70% of
Filipino adults in the country
must have bank accounts by
2023.
ENVIRONMENTAL
Reducing Environmental Footprint Bargaining Low Opportunity
 Through the use of technology, Power of
especially online banking apps, the Supplier
need to use paper has been
reduced. It enables consumers to
make their banking transactions
online, thus reducing their
 environmental footprint.

LEGAL
Data Privacy Act of 2012 Threat of Low Opportunity
 This law protects the Entry
fundamental right of a human to
privacy; thus, government and
private agencies must adhere to
the rules and regulations on
processing the personal data of
their clients. Companies have a
sound data privacy and
protection policy that reflects
their respect for the rights of
their clients.

External Factor Evaluation Matrix

Weighted
Key External Factors Weight Rating
Score
OPPORTUNITIES
There are still fifty-three (53%) or thirty-six 0.24 4 0.96
(36) million Filipinos who remain
unbanked.
New alternative distribution channels 0.16 2 0.32
Technology innovations that will affect 0.18 3 0.54
future of banking
THREATS
Substitute Banking: Fintech 0.22 2 0.44
Cyberattacks 0.20 4 0.80
Total 1.00 3.06

Analysis

The External Factor Evaluation (EFE) Matrix was used to identify the key
external opportunities and threats that are affecting the Bank of the Philippine
Islands (BPI). Based on the analysis, the total weighted score of 3.06 indicates that
the business has the ability to respond to external factors and has good potential to
stay in the industry. The most important factor in being successful in the industry is
―There are still fifty-three (53%) or thirty-six (36) million Filipinos who remain
unbanked," as indicated by the weight of 0.24. Also, BPI is doing an excellent job in
handling the two factors, "There are still fifty-three (53%) or thirty-six (36) million
Filipinos who remain unbanked," and "Cyberattacks‖ with a rating of 4. On the other
hand, "Substitute Banking: Fintech." gives a threat to the company, for it might give
their clients more than what they are offering. However, BPI is continuously
improving and innovating to offer the best products and services to its customers.
VII. INTERNAL ANALYSIS

Internal Factor Evaluation Matrix

To determine the Bank of the Philippine Islands’ (BPI) strengths and weaknesses,
Internal Factor Evaluation (IFE) matrix was used to determine how an organization
operates in relation to its stated internal analysis. An Internal Factor Evaluation (IFE)
Matrix is a strategy formulation tool that highlights and assesses the primary
strengths and weaknesses in a business’s functional areas, as well as providing a
foundation for discovering and assessing linkages between those areas.

Key Internal Factors Weight Rating Weighted

Score
STRENGTHS
1. Long banking history and tradition 0.15 4 0.60
2. On August 7, 2020, the Bank exceeded its initial 0.27 4 1.08
targets of P 21.5 billion from the country’s first
COVID Action Response Bonds.
3. BPI has tapped IBM to accelerate the 0.20 3 0.60
implementation of its digital banking agenda with a
secure, open and scalable hybrid multicloud
platform. It ensures policy compliance across all
environments and 25% rise in its retail digital
transactions, including money transfers, interbank
transfers, transactions with e-commerce partners,
and bills payment.
WEAKNESSES
1. Long product cycle 0.18 2 0. 36
2. The credit risk continually arises from its core 0.20 2 0.40
lending and investing activities. The bank’s loan
loss provisions stood at P21.06 billion, exceeded
its expected loan loss provision of 15.01 billion.
TOTAL 1.00 3.04

Analysis

As shown on the Internal Forces Evaluation table above, BPI scored 3.04. It shows
that the Bank has a weighted average internal position. This reiterates the fact that
the company is strong in terms of their COVID Action Response Bonds.
It did tapped IBM to accelerate the implementation of its digital banking agenda with
a secure, open and scalable hybrid multicloud platform. Its longest history in the
industry does add to the recognition and being well trusted bank in the Philippines.
From the illustration table, it concludes that BPI has a good internal structure.
In contrast, the highest internal weakness of BPI falls on credit risk continually arises
from its core lending and investing activities. Even though it does have its
weaknesses that directly affect the customers’ satisfaction about the offered
products and services, it still can be solved by having an extra effort to improve their
virtual system.

Management

Corporate governance, which includes the oversight mechanisms and the manner in
which BPI and its subsidiaries are governed, is the cornerstone of the bank’s
strength, sustainability, and long-term existence. It entails how decisions are made
and how the bank deals with various stakeholder interests and relationships,
including those of shareholders, customers, regulators, employees, and the general
public, to ensure their accountability. They recognise that accountability to their
shareholders and all of their stakeholders is an essential and important factor in
great performance, therefore they construct their policies, processes, and working
environment accordingly. Aiming to expand on the strong corporate governance
foundations already in place to fulfill that pledge, BPI as one of the most trusted
companies in the nation wants to maintain its history of trust among clients,
consumers, colleagues, and stakeholders. They measure their success by the level
of trust they are granted, not by their position or size. Thus, as they innovate their
core banking business and the products and services they offer, they put their
attention on deftly creating value, generating strong returns, and responsibly
managing risks. By doing this, they can offer the best solutions to their customers
and markets and advance greater financial inclusion in the country.

Marketing

The BPI’s client base has expanded significantly as a result of the expansion of the
ways in which customers can bank with them. BPI has been at the vanguard of
banking through electronic channels since it brought automated teller machines to
the Philippines in 1983—online banking, mobile banking, and phone banking. The
majority of their customers now are signed up for at least one of their electronic
channels, and those who are are frequent users of these channels. Nearly 70% of
the Bank’s 270 million transactions are now completed electronically when adding
transactions completed through their internet, mobile, and phone banking
applications to transactions completed through their automated teller and cash
acceptance machines. In contrast, 30% of the Bank’s transactions are now made
―traditionally‖ through a branch teller. Their front-line staff can now spend more time
determining and meeting the financial needs of their clients due to the increase in the
use of electronic channels. Transaction volumes that are higher and more stable
should follow.
The Bank’s total deposits climbed by 23% in 2013, from Php 802 billion to Php 989
billion. Savings and current accounts are included in the total deposits. The Bank’s
financial performance in 2013 was largely driven by the strength of its broad range of
retail, corporate, and commercial banking products and services tailored to the
needs of its customers, offered through the Bank’s many business segments and
channels.

Finance and Accounting

The Bank’s total assets reached Php 1.2 trillion, Php 210.1 billion or 21.3% higher
than last year’s Php 985.2 billion. The Php 186.3 billion, or 23.2%, increase in total
deposits, which rose to Php 988.6 billion, was substantially responsible for this rise.
Deposits in both current and savings accounts rose by Php 194.2 billion, or 39.5%.
Total capital funds increased Php 7.7 billion, or 7.8%, to Php 105.8 billion from the
previous year’s Php 98.1 billion. This rise in capital resulted from an increase in
operating earnings after paying cash dividends. Due to higher actuarial losses on the
Bank’s defined benefit plan and lower market valuation of the Bank’s securities that
are currently available for sale, accumulated other comprehensive income (loss)
declined by Php 4.6 billion, or 322.7%.
At Php 302.5 billion, BPI’s market capitalization remained the highest in the sector.
The Bank’s stock traded at a premium of 2.9 times its Php 29.37 book value per
share.
Loans, after deducting impairment losses, totaled Php 635.2 billion, an increase of
Php 108.6 billion, or 20.6%, from Php 526.6 billion the year before. Due to increased
credit demand from international corporations and conglomerates, there has been an
increase in loans. The ratio of non-performing loans increased from 1.5% last year to
0.49 and is lower than the industry average of 2.4%. (November 2013).
Liquid assets increased Php 93.3 billion, or 44.2%, to Php 304.2 billion largely on
higher balances with BSP. Investment securities at Php 183.7 billion increased Php
1.1 billion from prior year’s Php 182.6 billion. Held-to-maturities securities increased
Php 19.9 billion, or 26.1% due to additional investments, while available-for-sale
securities decreased Php 18.8 billion, or 17.7%, due to reduction in local and foreign
securities position.

Production and Operation

The operations of banking and investment services companies are ill-prepared to

offer or support the radically new business models required to cope with ongoing
industry disruption. Operational modernization and transformation are hot topics for
Bank CIOs, heads of operations, and architects. They must implement changes
across people, processes, and technologies to build open, intelligent operational
systems that serve the business since market forces are severely challenging the
status quo. For operations to foster strategic innovation that supports new business
models, it must look beyond its current concentration on incremental efficiency
improvements. To enable the generation, access, analysis, and application of
information as required by end users, bank system assets and functions must be
usable in end users’ contexts across internal and external bank borders. Although
expensive and risky, this has the potential to give banks tangible advantages. While
weighing the risks and potential costs against the business advantages, operations
experts must create convincing business cases and suggest suitable front-to-back
and internal-to-external structures and content.
In the face of a global economic crisis, BPI reaffirmed its commitment to helping
customers advance financially and made sure that their money is safe and secure.
Expect more in life with BPI was a corporate promotion that provided BPI customers
more value in the form of goods and services.

Research and Development

The business environment for digital banks is changing quickly, and as a result, BPI
realized that it needed to speed up innovation, future-proof its technology, transform
digitally, and be ready for shifting market dynamics. To advance into the era of
transformation brought on by the Fourth Industrial Revolution by providing and
optimizing new digital banking services and experiences for its clients. In 2016, they
began their digital transformation, with the goal of improving client journeys across
all of their client-facing platforms. Early on, they realized that ―agile at scale‖ was
essential for the digital transformation. Phase oFne concentrated on developing their
digital platforms for online and mobile banking, laying the technological groundwork
for their digital ambitions. The current phase of their digital journey, known as BPI
Digital Banking 2.0, focuses on the five (5) pillars namely; omni channel experience,
customer experience, high tech, high touch, the bank of everyday, and cybersecurity
and privacy, with the goal of making digital financial transactions for customers
frictionless.

Management Information System

Managing cloud-based services across several providers in response to a quickly

changing business environment is becoming the standard in a multi-cloud world. BPI
and IBM have agreed to a $260 million multi-year services contract that will provide
IT infrastructure support for agile IT, hybrid cloud computing, and digital development
capabilities to speed up BPI’s digital transformation. The cloud capabilities of IBM
are being used by Xvi BPI to update its primary IT infrastructure. The new IT
infrastructure will assist BPI in achieving its digital transformation objectives, which
include providing bank branches with ongoing technological upgrades, adequate
information on the composition of the credit portfolio, including identification of any
risk concentrations, and other financial services applications for clients. BPI has
tapped IBM to help it realize its digital banking goals more quickly using a secure,
accessible, and scalable hybrid multi-cloud platform. Together, with support from
IBM and other public and private cloud service providers, they upgrade the
fundamental IT infrastructure and create an open and integrated API economy. The
new IT environment will promote automation of disaster recovery management,
boost application monitoring, improve server utilization optimization, and drive
capacity management and quick API development.
VIII. THEORETICAL FRAMEWORK

Strengths, Weaknesses, Opportunities, Threats (SWOT) Matrix

OPPPORTUNITIES THREATS

1. There are fifty-three 1. Substitute banking:

(53%) or three six Fintech
(36) million Filipinos 2. Cyberattacks
who remain
unbanked.
2. New alternative
distribution
channels
3. Technology
innovations that will
affect future of
banking
STRENGHTS S/O - Use Strengths to S/T - Use Strengths to
take advantages of minimize Threats
1. Long banking Opportunities
history and S3 – T1
tradition. S1 – O1 Create BPI platform as a
2. On August 7, 2020, Being a well-known bank one-stop shop online
the Bank exceeded by having a long banking platform. To focus on
its initial targets of history and tradition the bringing as many third
P 21.5 billion from BPI we can assume that parties as possible and
the country’s first Filipinos are aware of the invest in a process to
COVID Action banking and it is a chance screen and compare third
Response Bonds. for the BPI to attract those party offerings in order to
3. BPI has tapped Filipino’s that are still not create a one-stop shop.
IBM to accelerate yet banked.
the implementation S3 – T2
of its digital S3 – O3 Fasten and take double
banking agenda Digitize commercial efforts to implement BPI
with a secure, open banking offerings and 2.0. Utilize its profit and
and scalable hybrid automate processes. invest in other activities,
multicloud platform. Create a technology such as the acquisition of
It ensures policy steering team to take assets and extended
compliance across technology-enabling demographic reach to fight
all environments actions and integrate with cyberattacks.
and 25% rise in its larger IT.
retail digital
transactions, S2 – O2 – O3
including money BPI take advantage of the
transfers, interbank new alternative distribution
transfers, channels with the help of
transactions with e- technology innovations to
commerce exceed their initial target
partners, and bills during the action respond
payment. bonds for COVID 19.
WEAKNESSES W/O – Improve
Weaknesses by taking
1. Long product cycle advantage of
2. The credit risk Opportunities
continually arises
from its core W1 – O2
lending and Having new alternative
investing activities. distribution channels can
The bank’s loan take the long product cycle
loss provisions a little faster. It can
stood at P21.06 enhance the ability of the
billion exceeded its BPI to make their product
expected loan loss cycle faster than before.
provision of 15.01
billion. W2 – O3
Product development.
Banks need to reset their
value focus and digitize
their credit risk processes.
W/T - Work to eliminate
Weaknesses to avoid
Threats
W1 – T1
Broadened consumer base
and enhancing product
cycle: A bank and fintech
partnership can broaden
their market share and
reach previously
uncontacted customers to
make the product cycle
faster.
W2 – T1
Develop a standard
process for handling and
monitoring the credit risks
that may arise during their
activities.

IX. ALTERNATIVE COURSES OF ACTIONS (ACA’s) / STRATEGIES

A. (Product Development): Recommend to BPI's management the innovation of

their services by collaborating and partnering with fintech companies.

Advantages Disadvantages
 Maintain and enhance customer  Not easy to find a trustworthy fintech
satisfaction rate to BPI through company, as BPI needs to secure its
provided innovations and reputation.
convenience.  BPI will have additional costs for
 Provide additional features and paying the fintech company and the
functions to BPI's financial services. system.
 Allows BPI to provide various
services to their customers even with
the pandemic.
 Allows BPI to lessen the face-to-face
transaction with their customers as
required to end Covid-19.
 It will make BPI easily accessible to
people.
 BPI will move one step forward
toward technological advancement.
B. (Market Development): Recommend to BPI's management the targeting of
unbanked Filipinos by making BPI close to them.

Advantages Disadvantages
 BPI may encourage many potential  BPI will have additional costs for
bank customers to join their financial building outlets and the manpower
services as Filipinos become needed to operate them.
informed about banks.
 It will increase brand awareness and
recognition.
 Able to reach untapped areas.
 It will increase BPI's market share
relative to its competitors.
 Accumulate additional customers and
income for BPI.
 Allows them to flourish even with the
pandemic.

C. (Product Development): Recommend to BPI's management the utilization of the

increasing demand of the population to the internet through the improvement of
online banking.

Advantages Disadvantages
 Cope with the effects of Covid-19.  Lack of personal relationships with
 Making BPI the preference of bank customers.
consumers through its upgraded  Online banking provides limited
online banking services. services.
 Lessen the work of BPI's staff as
money transfers and cheque deposits
are online.
 Lessen the face-to-face transaction to
avoid the inconvenient operation of
BPI that Covid-19 may cause.
 Smoothen BPI's online banking
system.

X. EVALUATION OF ACA’s ǀ STRATEGIES

Choosing what strategy is the best to implement, the group use the decision matrix
below. The decision was based on the strategy and objective that was first
formulated. Instead of using weights percentage for the evaluation, we’ll be using a
point based system to identify which strategy is the best to use.
ACA 1 - Recommend to BPI's management the innovation of their services by
collaborating and partnering with fintech companies.

ACA 2 - Recommend to BPI's management the targeting of unbanked Filipinos by

making BPI close to them.

ACA 3 - Recommend to BPI's management the utilization of the increasing demand

of the population to the internet through the improvement of online banking.

CRITERIA ACA 1 ACA 2 ACA 3

Increase the active (+)increase the (+)Potential new (+) through the
users by focusing satisfaction rate of users or those improvement of
on banking users through the unbanked Filipinos online banking
digitalization new offerings with may see the users may feel that
the help of other convenience of banking is
companies banking through convenient to use
the digitalization of
banking
Promote economic, Increase security (+) increase brand May cause of
environmental and risk through the awareness as well decrease in the
social goals increase of as strengthen the funding that
interconnection bank’s connection promotes
between market in social economic,
participant environmental and environmental and
economic. social goals
To become the (+)Can be possible There is no (+) continuous
rank two banks in with the help of assurance that new improvement and
the Philippines new innovation users will continue upgrade can lead
brought by the new do banking to more power
partner company
Assist society and Other channel (+) creating (+)Online banking
clients in achieving participant may connection to the lets users see their
financial cause problems market built trust account any time
independence which makes which somehow
achieving financial serves as
independence motivation
easier
Increasing Fintech industry is (+) able to reach More energy got
sustainability of the said to be one of and asses areas in from using online
environment the largest emitter the country that application means
of greenhouse needs assistance more damage to
gasses with connection to the environment
the environment
Contribute to (+) creates (+) build relation Decreasing the
nation-building connection to other towards its users physical interaction
companies including those
who’s in untapped
area
Total Positive 3 5 3

Over Negative

CONCLUSION BASED ON ACA EVALUATION

After the evaluation ACA 2 gains more positives with a total of 5 positives
against ACA 1 and ACA 3 on the given criteria above. The evaluation doesn’t come
with negatives as the two strategy serves as a stepping stone for ACA 2 to be
effective as a help from related company such as fintech and an innovation or
improvement to the online backing can help to connect on its potential new users.
However ACA 1 and ACA 3 still have few positives because both strategic action is
considered as foundation to connect at the same time encourage the market.

IX. RECOMMENDED STRATEGIC ACTION

Basing on ACA 2 or Recommend to BPI's management the targeting of unbanked

Filipinos by making BPI close to them. The groups short term strategic action
includes; (1) separating the target potential users by age (students, working adults,
adults); (2) asses the current strategic action and revise depending what age group
you are advertising; (3) seek for a perfect location where all your target group is
present and have an acceptable number (4) position the business and start
connecting with the potential users.

After achieving the short term strategic action and maintaining it to be aligned on the
objectives continuously BPI can now proceed to their long term strategic action and
have a total of 3.2 million active users of BPI Online and mobile app and becomes
the rank two banks in the Philippines.
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