The number of digital savings accounts totaled 2.82 million as of the end of September, a surge of 161 percent from 1.08 million a year earlier, boosted by higher interest rates at banks and upgrades to their online services, Financial Supervisory Commission (FSC) data showed.
Most banks offer interest rates higher than 1 percent for digital savings accounts, which is tempting given that interest rates for demand deposits offered by conventional banking services hover between 0.1 and 0.2 percent, a commission official surnamed Hung (洪) said by telephone yesterday.
Banks are willing to offer higher interest rates for virtual accounts, as they have lower costs, requiring no branches or employees, while they also want to cultivate a strong consumer base for online services, Hung said.
People are encouraged to use digital savings accounts, as banks add more functionality to their online platforms, such as free transfers, bill payments and wealth management, he said.
National ID card holders aged seven or above and foreign residents 20 or older are allowed to open digital savings accounts after the commission eased rules last month.
As a result, the number of digital savings accounts is expected to continue growing this month and reach 3 million this year, Hung said.
With the three new Web-only banks to launch operations in the first half of next year, the number of virtual accounts are expected to increase further, he said.
Local banks require applicants to submit a photograph of their ID cards to prove their identity, but the commission is mulling a system that allows banks to collaborate with telecoms to skip this step, Hung said.
“As consumers need to use two forms of identification — such as their national ID and National Health Insurance cards — when registering a mobile number, we think telecoms could help banks with authenticating identification,” he said.
The commission received this proposal from the Bankers’ Association of the Republic of China (銀行公會) and would likely approve it when banks prove that their information processing system safe and effective, he said.
There are three types of digital savings account, Hung said.
The first is open to new clients at a bank, but requires a Citizen Digital Certificate, the second is only available to people who already have a savings account with the bank, and the third requires no Citizen Digital Certificate and anyone with a credit card at the banks can apply, but it has the most restrictions on fund transfers, Hung said.
Type 3 is the most popular, with 1.1 million accounts, while type 1 has 912,527 and type 2 810,924, he said, citing FSC data.
The number of type 1 accounts has shown the fastest rate of growth, increasing 3.3 times as of the end of September from a year earlier, the data showed.
Taishin International Bank (台新銀行) ranked first for the number of digital accounts, having 1.57 million at its Richart online service, followed by O-Bank (王道商業銀行, 385,151 accounts), Cathay United Bank (國泰世華銀行, 379,905), Bank SinoPac (永豐銀行, 117,394) and Hua Nan Commercial Bank (華南銀行, 79,471), the data showed.
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