Union Bank of the Philippines (UnionBank) is going digital to the core as it continues to embrace and harness technology amid an ongoing drive for inclusive prosperity.
In its first ever Tech Up Expo held at Shangri-La at The Fort on April 26-27, UnionBank – dubbed as the Best Digital Bank in the Philippines by Asiamoney – showcased its milestones after it embarked on a digital transformation journey since 2016, with the end goal of achieving greater financial inclusion for all Filipinos.
Among these highlights is UnionBank’s work with rural banks using blockchain as a platform.
UnionBank believes helping rural banks, which are in the best position to spur rural development being part of the communities in which they operate, will make them more efficient and be able to handle more transactions.
Statistics show that from 1400 in 1988, the number of rural banks has gone down to 400 this year. Problem areas include the fact that most rural banks are not members of the Philippine Clearing House and the SWIFT network, they lack IT systems so processes are very manual and paper-based, and requirements to be part of BancNet, PCHC and SWIFT are too complex.
This unfortunate development has prompted UnionBank, a firm believer on the power of technology, to push blockchain to help some rural banks scale up their operations.
Blockchain is a distributed data ledger involving a large network of entities where data is stored in “blocks” that are continuously updated and are secured using cryptography. Blockchain makes data management and data-driven processes decentralized, tamper-proof and more transparent than ever.
“The world is moving forward and we’re already seeing solutions that make the whole ecosystem more efficient,” said UnionBank President and CEO Edwin Bautista. He underscored the importance of being an early adopter. “The early adopters have a very important role in nation-building. They are the fast ones to show the others if something works or not. If they succeed, then the others will surely follow,” he said.
UnionBank is no stranger to innovation. Last year, it launched the new, fully digital banking platform EON, an improved version of its original platform that was first launched in 2000.
Through this platform, a new prepaid account was introduced which can be obtained at local 7-Eleven convenience stores and Ministop outlets nationwide, making it more accessible to the unbanked and underbanked.
EON also introduced the selfie-banking feature – the first in Asia – that lets clients log into their accounts by doing the famous selfie pose in front of their smartphones. It eliminates the use of passwords while offering more security with the facial recognition feature.
EON has continually adapted and evolved into an award-winning neo banking platform focused on providing secure, convenient, and innovative banking solutions to its users, partner communities, and merchants, too.
With its latest enhancement, EON accepts other banks’ cardholders to transact using the EON mobile application. EON is also ready to serve merchants with the loyalty program, “ubycash”, and the digital card acceptance system “POW!.” Likewise, EON is now ready to compete with its innovative lending programs “Zero” and “Zoom” for gadgets and cars, respectively.
Still another landmark initiative: UnionBank is redefining banking after it unveiled its first fully digital bank branch – again another first in the country. Located along Ayala Avenue in Makati City, UnionBank’s The ARK utilizes digital technology to augment actual banking experience.
This so-called “paperless” branch has self-service kiosks, virtual reality boxes, refreshments and internet connection, enabling customers to do more banking transactions.
ARK clients are not attended to by tellers but by ambassadors, equipped with IPads. With these IPads, it only takes 10 minutes to open an account – from one hour before.
UnionBank plans to open over 10 more ARK and ARK Light branches in Metro Manila, Cebu and Davao within the year.
Centerpiece of UnionBank’s digital transformation is its partnerships with fintechs. The opening of its application programming interface (API) practically enables all Philippine businesses to more easily gain access to the ongoing financial technology revolution.
Using IBM’s Bluemix – one of the most sophisticated cloud platforms in the world – the opening of the bank’s APIs will allow fintech companies to connect their own applications or platforms to UnionBank.
At the same time, UnionBank becomes the “operational backroom” for these companies.
Through UnionBank’s various initiatives, it has established itself as the fintechs’ “Bank of choice.” Numerous fintechs have approached UnionBank for their basic banking needs as reflected in their total relationship balance or TRB and through-put volumes.
The Bank is also a proud pioneer member of the ASEAN Fintech Innovation Network or AFIN led by the Monetary Authority of Singapore, giving the bank the opportunity to connect with fintechs in the region.
Right Technology = Global Competitiveness
Bautista believes that harnessing various technologies ensures that Filipino owners of small and medium-sized businesses are able to stand on their own and hold their ground against competitors not just in the Philippines but from different parts of the world.
He clarified that inclusive prosperity does not mean dole-outs that tickle down to the bottom of society.
“When we talk about inclusive prosperity, it’s about Filipinos being empowered through technology to be globally competitive,” Bautista said.
He cited the country’s strong economic growth, adding that by utilizing the right technologies, there is a potential for this growth to become stronger and more wide reaching.
Integrated Operations Center
Apart from technology, the other pillars of UnionBank’s warchest are processes and people.
As such, UnionBank is investing several millions over the next few years to future-proof the business. Last year, the Bank launched its 24/7 security operations center (IOC) – a collaborative facility for teamwork and communication among the Bank’s cybersecurity pillars to develop effective security measures and thereby counter constantly evolving cybersecurity threats.
A situation or war room is stationed in between the Security Operations Center and the IT Operations Center, which ensures faster collaboration for meetings, conducting conference calls and tackling issues, downtimes and incidents that arise. The IOC is also responsible for monitoring the performance of systems, servers and applications, as well as monitoring of uptime of leased lines.
No One Gets Left Behind
From the onset of their digital transformation, Bautista has made a promise to all UnionBankers that no one will be left behind in their journey. He is making sure that UnionBank employees will be equipped with the necessary skills so that they can move seamlessly from jobs that are disappearing into new jobs that are emerging.
The Bank has a powerful human capital management (HCM) system, a cloud-based platform that aligns virtually all matters pertaining to human resources including candidate research, relationship management, performance appraisal and monitoring of employee’s career development.
An important feature of the HCM is that it provides the opportunity for UnionBank employees to design their own individual training curricula, in accordance with their current roles or alternatively, their future career aspirations.
Bautista believes that banking is a “people business” and that an engaged employee, an engaged workforce delivering great services will, at the end of the day, translate into an engaged and loyal customer group.