EastWest Bank’s hybrid strategy—digital transformation with a human touch

EastWest Bank, with PHP 254 billion ($4.3 billion) in total retail assets, is embracing digital transformation while capitalising on its strengths as a traditional banking powerhouse. The bank’s strategic roadmap involves enhancing its loan segment, launching digital products like Easy Way and Easy Biz, and spearheading the Store of the Future project in the Philippine banking sector.

In 2023, the bank reported a 32% increase in net income to PHP 6.1 billion ($104 million), fuelled by a 25% rise in its consumer lending portfolio, constituting an industry-leading 80% of total loans. The bank’s total loans and receivables saw a 15% surge, reaching PHP 296.6 billion ($5 billion).

Under the leadership of CEO Jerry G Ngo, EastWest is investing significantly in digital banking capabilities, allocating over PHP 2 billion ($34 million) to bolster the IT and cybersecurity departments. The bank’s focus on becoming a next-generation digital bank is complemented by investments amounting to PHP 2 billion ($34 million) in 2023, or 10% of its total operating expenses.

The bank’s hybrid strategy integrates digital tools with traditional banking, enhancing cross-selling opportunities through digital channels and innovations like Komo, its digital bank, and Esta chatbot.

The bank has taken a significant step forward in the digital payments landscape by developing EastWest Pay, its proprietary near field communication mobile payment application, establishing itself as a leader in technological innovation both in the Philippines and globally.

“Our hybrid strategy ensures a seamless banking experience by integrating digital innovations with conventional banking services,” said Martin Reyes, head of marketing. He explained: “This approach is particularly relevant in the Philippines, where a significant portion of the population still relies on traditional banking methods.”

Ivy Uy, SVP and deputy head of the retail banking group, highlighted the potential of digital banks to offer higher returns on deposits, making them an attractive option for customers seeking better financial benefits. To capitalise on this, EastWest Bank is focused on increasing its digital-first customer base from 32% to an ambitious 45% by the end of the year through targeted marketing campaigns, user-friendly digital interfaces, and enhanced online services.

Boosting competitive edge through fintechs

Technological advancements are a critical component of EastWest’s strategy. Reyes discussed the bank’s commitment to moving critical systems to the cloud and launching new applications for both affluent and small business customers. Additionally, the bank is considering partnerships with technology companies to access innovative solutions and best practices, aiming to create proprietary technologies that offer a competitive edge.

Understanding and improving the customer journey is central to the bank’s approach. Uy emphasised tailoring services to meet the specific needs of different customer segments, ensuring a customer-centric focus that fosters loyalty and satisfaction.

The bank’s Store of the Future project that aims to rationalise branch locations and formats, is underway. By identifying high-value areas and launching value-store formats, EastWest can better serve its target market and enhance the overall customer experience.

While embracing digital transformation, the bank remains committed to addressing climate change through its corporate social responsibility initiatives. The bank is adjusting its projects to mitigate climate impact and promote sustainable practices, ensuring a balanced approach to growth.

Looking ahead, the bank plans to raise up to PHP 30 billion ($512 million) in 2024 to support further expansion, with a focus on improving consumer loans and leveraging its automated credit decisioning and loan origination systems.

EastWest, formally known as East West Banking Corporation, is the 11th largest bank in the Philippines in terms of assets. It was founded in 1994 in Manila by the late tycoon Andrew Gotianun, and his wife. It is a member of the Filinvest Group, led by the Gotianun family.