By Beatriz Marie D. Cruz, Reporter
TONIK Digital Bank, Inc., the Philippines’ first licensed digital-only bank, seeks to broaden its presence within the country by targeting the unbanked population through strategic branding, in accordance with its chief executive officer (CEO).
“I feel branding is a vital issue that’s being ignored by each the standard banks and truly by most of our competitors in digital banking,” Greg Krasnov, founder and CEO of Tonik Bank, said in an interview with BusinessWorld.
Bank branding within the Philippines is “typically intimidating,” he noted.
“Our research shows that the Filipino mass market thinks banks are by the wealthy and for the wealthy,” he added, noting that this stays a major barrier to constructing trust in banks and inspiring consumers to make use of their services.
About 76% of Filipinos remain unbanked and underserved — the very best percentage amongst five Southeast Asian countries. Indonesia followed at 67%, Vietnam at 47%, Malaysia at 40%, and Thailand at 25%, in accordance with a 2024 report by Euromonitor International.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that in 2022, the share of Filipinos with bank accounts reached 65% of the adult population.
To make digital banking more accessible to Filipinos aged 25 to 30, Tonik has positioned its brand as “approachable.”
“Once we were creating Tonik’s branding, we were consciously attempting to counteract that,” Mr. Krasnov said.
“Our brand is funny and approachable. We’re on a first-name basis with our customers. We wish them to fall in love with us, so we’re your financial girlfriend or boyfriend.”
As an illustration, Tonik’s “Luv Stash” allows users to ask their partners, friends, or relations to contribute to a shared savings “pocket” without opening a joint checking account. In celebration of Valentine’s Day, users who create a Luv Stash by the tip of February can earn 5% interest every year.
Around 57% of Filipino consumers said they’d likely spend more on brands that provide personalized experiences, in accordance with customer engagement platform Twilio.
To further enhance user personalization, Tonik also leverages alternative data to investigate consumer behavior and tailor its product offerings.
Tonik has onboarded greater than two million users since its launch in 2021.
Customers can open a savings account, deposit funds, manage payments, and own a virtual debit card through the digital banking platform. Its key loan products include the credit builder loan and the shop installment loan.
Under its Tendo brand, Tonik also partners with employers to supply worker advantages akin to life and medical health insurance, savings and money loans, and worker rewards.
For 2025, Tonik is targeting greater than 150% annual growth in its lending portfolio. Last 12 months, its loan portfolio expanded by 110% 12 months on 12 months, driven by an increase in employer and retail partnerships offering its loan products, Mr. Krasnov said.
“We spent three years specializing in achieving unit profitability, and we’re now profitably lending to those unbanked and uncredited consumers.”
Nevertheless, Mr. Krasnov acknowledged challenges within the widespread adoption of Tonik’s payroll lending product, which has only covered 10% of the market.
“It is a relatively recent solution for employers within the Philippines,” he said. “The challenge is convincing large employers to partner with us because it is a very cost-efficient technique to provide credit access to their employees.”
The Philippines also continues to lag behind its Southeast Asian peers in consumer lending penetration, Mr. Krasnov noted.
“We predict the Philippines must grow consumer lending fourfold to meet up with the Southeast Asian average.”
Mr. Krasnov cited inflationary shocks as a possible risk to lending growth.
“We hope that this 12 months won’t have as many inflationary shocks that impact consumer purchasing power,” he said. “When customers feel financial stress, it becomes harder for us to make decisions.”
The BSP expects inflation to average 3.3% in 2025, remaining inside its 2-4% goal range for the 12 months.
Mr. Krasnov also emphasized the necessity for the mass deployment of the Philippine Identification System (PhilSys) card, or national ID, to assist onboard more users and reduce lending fraud.
To expand consumer lending, Tonik plans to partner with more employers and retailers to extend accessibility to its loan products.
The digital bank can also be set to speed up the rollout of its credit builder loan, which inspires users to take a small money loan to determine a credit history and eventually increase their credit limits.
“The concept of the credit builder is that users proactively construct their credit history through our product.”
Tonik can also be exploring expansion into automotive and mortgage loans.
“Over time, we are going to proceed rolling out more products that fit into the client’s lifestyle as they proceed to upgrade their life,” Mr. Krasnov said.
