Fitch Ratings has cast doubts on the ability of digital banks to significantly challenge traditional lenders in the medium term, despite a large unbanked population offering potential. The Bangko Sentral ng Pilipinas limited digital banking licences to six, focusing on monitoring sector growth and ensuring competition. Digital banks currently hold less than 0.4% of system deposits, with low average customer deposits indicating limited primary account usage. Fitch expects these banks to intensify deposit competition over the next two years to develop sustainable business models. However, the strategy of attracting customers through pricing is viewed as unsustainable, particularly in a high-interest rate environment. Furthermore, the ease of digital account switching challenges customer retention, as clients tend to move funds following promotional rate periods.