Promoting financial development in Asia: Mizuho is helping Tonik Bank to become a digital bank rooted in everyday life in the Philippines

Mizuho Digital Transformation

September 19, 2023


Mizuho Bank aims to contribute to financial inclusion across Asia. The Philippineshas made particularly noteworthy strides in this area. Only 30% of the population of the Philippines possessed a bank account as of 2018, but the country has one of Asia’s youngest demographics, with smartphone ownership quite high. Against this backdrop, Tonik Digital Bank offers smartphone-based, user-friendly financial services. As well as investing in Tonik, Mizuho is also providing support by offering Tonik our experience and expertise. The Tonik Group and Mizuho Bank are jointly pursuing several initiatives with the goal of building up financial infrastructure in the Philippines.


Mizuho has invested in Tonik Financial, a firm promoting the development of new financial infrastructure in the Philippines

In order to further strengthen our ability to meet the increasingly diverse and complex needs of our clients, Mizuho Bank strives to utilize our accumulated knowledge and expertise to offer timely support helping our clients improve their corporate value and business growth. This support is not limited to Japan, with Mizuho also focusing on global market financial needs. Although Asia is projected to enjoy economic growth on the back of population growth, the financial infrastructure of the region is still nascent, and financial inclusion has become a social issue. Financial inclusion involves providing everyone with the financial services necessary to partake in everyday economic activity. Some people are in a precarious economic situation owing to their exclusion from financial services due to poverty or discrimination, for example. Financial inclusion aims to help these people access basic financial services. It also involves utilizing fintech and other new technologies to help people without bank accounts to deposit and send money. Mizuho Bank has explored strategic investments in Asian businesses as part of our goal of contributing to financial inclusion in Asia through new, digital technology-focused financial services and expanding our business portfolio in the region.

Although 70% of the population of the Philippines did not possess a bank account as of 2018, smartphone usage is high, particularly among the young, with mobile payments and other digital financial services spreading rapidly, even among people without bank accounts. Given this, Mizuho believes banking services provided through digital channels will help drive the development of financial infrastructure in the Philippines. In February 2022, this belief led Mizuho Bank to invest in Tonik Financial Pte. Ltd. (CEO: Krasnov Grygorii; “Tonik Financial”), which operates Tonik Digital Bank, Inc. (“Tonik Bank”), a digital-only neobank operating under the Tonik brand and the Philippines’ first private company to secure a digital bank license.


In the Philippines, only 30% of the population had a bank account
Who is Tonik and how is it using digital technology to provide a safety net through bank account ownership?

Financial circumstances and practices in the Philippines differ from those of many other countries. For example, only around 30% of the population had a bank account as of 2018. This can partly be explained by the particular approach to finances in the Philippines. Workers there often get paid through a type of debit card called a “salary card” or “payroll card” rather than through a designated bank account, for instance. Furthermore, when people make big purchases, it is common to borrow the money from family members or friends. As such, the bank account ownership rate is low because many Filipino people do not feel a need to possess a bank account. At the same time, with the Philippines projected to see economic growth, opportunities for economic expansion will probably lead to increased demand for basic financial services like deposits, loans, and payments. It is also possible that demand for bank accounts might increase across the Philippines as a whole.

Under these circumstances, Tonik Bank was established to drive the development of financial infrastructure in the Philippines. Tonik Bank was the first private enterprise in the Philippines to receive a digital bank license from Bangko Sentral ng Pilipinas (BSP), the country’s central bank, with this license permitting Tonik Bank to provide branchless, digital-only bank services. In order to promote the usage of bank accounts in a country where people are unaccustomed to using one, Tonik Bank offers a high interest rate of 6.0%, far above the central bank’s 2.5% policy rate, and it has also introduced an eKYC (electronic know your customer) system for online identity verification. There are around 20 kinds of customer identification documentation in the Philippines, with identity verification a somewhat laborious process. By introducing the eKYC process, Tonik Bank has made it easier to open a bank account. In doing so, it has helped to eliminate the concerns felt by many Filipino people about visiting a bank or filling in paperwork. By implementing these measures before other banks, Tonik Bank has managed to secure USD 100 million in consumer deposits. Tonik Bank was also the first digital bank to provide loans. Many Filipino people were unfamiliar with opening bank accounts or accessing loan services, but Tonik Bank has rectified this by providing easy-to-use digital services in a way that appeals to smartphone users.


What Mizuho Bank can do in the Philippines, a land with a very different culture and customs to Japan

Mizuho Bank is supporting Tonik Financial through investment, though this is not all. Mizuho has seconded personnel to Tonik Financial and Tonik Bank, for instance, and we also provide wide-ranging operational support using our accumulated knowledge, expertise, and connections as a Japanese megabank. As one example, Mizuho Bank Manila Branch introduced Tonik to a Japanese client interested in TendoPay, a Tonik group company that has partnered with over 200 companies in the Philippines. TendoPay provides employee benefits and financial services, such as investments, savings, and special loans. This minimizes the burden on employers while also boosting employee satisfaction levels and keeping down turnover rates. The expansion of the welfare and benefits that underpin employer/employee relations is a pressing issue for many companies, and Mizuho is helping TendoPay to build win-win relations with its clients.

Mizuho also provides support from Japan. Specifically, we monitor management conditions as a Tonik shareholder. We hold interviews with Tonik Bank members to find out about information provision needs and support for the risk management that Tonik should develop as a digital bank. Mizuho also offers cooperation by sharing our rules and systems as a megabank for Tonik Bank to use as reference examples according to each situation.


For both consumers and companies, Tonik will continue to make great strides as a digital bank in the Philippines

Thanks to the efforts of Tonik Bank and other digital banks, the bank account ownership rate in the Philippines had risen to 50% as of July 2023. In order to promote financial inclusion from here on, it will be vital to help improve Filipino lifestyles and businesses by expanding bank account ownership even more and by providing unsecured loans and loan services for employees, for example.

Digital marketing will have a key role to play in this process. If we can provide the most appropriate information to each citizen through marketing techniques that utilize digital technologies like big data and AI, this will help to change old habits and further revitalize economic activity.

Mizuho has already sent some of our people with digital marketing expertise to Tonik Bank, and they are working hard with local colleagues to tackle various challenges. Going forward, Mizuho will continue to help Tonik Bank strengthen and grow its financial services business, while also contributing to the further development of financial inclusion and retail finance in Asia by linking up the knowledge and experience of Tonik Bank with other firms in which Mizuho has invested, including Vietnam’s Vietcombank and M-Service, and Indonesia’s Kredivo.

Text and photographs: Mizuho DX Editorial Department


This article is for general information only and is not intended to constitute any investment, legal, accounting, taxation or other advice of any kind from Mizuho Bank, Ltd. or any of its affiliates (individually or together, as the context may require or admit, "Mizuho").
While every care has been taken in preparing this article, no representation, warranty or other assurance of any kind is made with respect to the accuracy, completeness or suitability of any information in the article for any purpose, including any data obtained from third party sources, and neither Mizuho nor any officer, director, employee, agent, advisor or controlling person of Mizuho shall have any liability to anyone relating to or arising from the use of any of the information in the article or for any error, omission or misstatement thereof (negligent or otherwise).
All opinions, estimates, forecasts, projections or forward-looking statements contained herein (if any) may not be relied upon as facts nor as any representation or guarantee of future results. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modelling, valuation or back-testing. Mizuho does not have any obligation to update any of the information contained in this article.
Back to top