UnionBank targets bigger take from digital transactions
UNIONBANK OF THE Philippines, Inc. is eyeing bigger revenues from digital transactions in the coming years, as they expect investments on technology to improve financial services offered to clients.
UnionBank Chairman Justo A. Ortiz said the bank is eyeing to raise the contribution of digital transactions to as much as a fifth of total revenues coming from an estimated 6-7% share currently.
“We want it to be maybe 20%, at least, of the transactional space,” Mr. Ortiz said in a recent interview. “The balance sheet will still play a role — that’s what banking is about, but that’s a limiting factor. We’re hoping that digital can be a less limiting factor.”
Asked for a target, Mr. Ortiz said this should take the bank about “three to five years.”
The Aboitiz-owned lender is among the banks which have been embracing financial technology the most, with the bank aggressively pouring funds into digital innovations, which even include blockchain and virtual currency.
The bank is set to launch the first automated teller machines meant for digital currencies, which would allow customers to buy and sell digital units for cash.
Aside from this, UnionBank has also set up concept branches called “The ARK,” which offer paperless and
all-online services even for over-thecounter transactions. This should also expected to attract more flows into the bank.
“It’s pivotal because it challenges the industry on the customer experience side,” Mr. Ortiz said, noting that UnionBank is also redefining themselves as a technology company.
UnionBank reported a P7.3-billion net income in 2018, down 13% from the P8.4 billion it made the previous year. Mr. Ortiz attributed the lower profits to problems incurred by their thrift banking subsidiary, City Savings Bank, after its partnership with the Department of Education for teacher loans was suspended early last year.
“It should be better than last year. I think it’s still a lot of business as usual, but we spent a lot of money last year on a lot of these different investments, some of them should now start coming through in terms of better expense management,” the company official added.