McKinsey & Co. warns that Philippine banks need to invest in digital offerings or risk losing their market share to digital financial service providers. Large traditional banks have failed to serve their potential customer base with their corporate and wholesale focus, the report says. Philippine banks have also under-invested in digital offerings, allocating less than 10% of their revenues to information technology, compared to an average of about 15% in the Asia Pacific region. The digital channels of Philippine banks only account for 5-15% of their revenues, while their peers in Asian emerging markets have an average of 25%. The authors of the report warn that incumbent banks must adapt quickly to the changing landscape or risk a permanent loss of market share to innovative competitors.