Home⇛SMN Digest⇛vol. 12 no. 1 (2026)

Digital Banks as Catalysts for Financial Inclusion in the Philippines: A Visible Hand Approach

Eleanor Geniston | Angelene Lacar | Jennifer Lacaza | Jonas Carlo Macasero | Christian Alan Vibar | Ruel Maningas

Discipline: Finance

 

Abstract:

Digital banks operate as catalysts for financial inclusion in the Philippines, wielding a ‘visible hand’ that transforms regulatory and technological enablers into accessible services while strategically navigating persistent economic and sociocultural barriers through innovative business models. This literature review examines how Philippine digital banks contribute to financial inclusion and what business model strategies they employ in response to external enablers and barriers. Using an integrated Political, Economic, Sociocultural, Technological, Ecological, and Legal (PESTEL) and Business Model Canvas (BMC) framework, the study synthesizes recent academic and industry sources to analyze both environmental conditions and strategic organizational responses. Findings show that political-legal and technological factors enable digital banking industry growth, while economic and sociocultural barriers persist, prompting digital banks to adopt platform-based revenue models, inclusive value propositions, and hybrid phygital engagement strategies. Yet several critical gaps remain, particularly the geographic reach of urban-based touchpoints, communication barriers that limit financial literacy building, and uncertainties around profitability drivers. The review concludes that Philippine digital banks serve as catalyzing mediums that transform regulatory and technological enablers into meaningful financial inclusion by strategically overcoming entrenched economic and sociocultural barriers.



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