Inclusion steps up

The quantum leap in global digital transformation had the pandemic as catalyst as a result of the quarantine requirements, which kept human interaction at a distance, including the conduct of commerce.

Since necessity requires it, banks made the jump to the virtual world, particularly since other non-financial institutions such as mobile telecommunications outfits have launched potential rivals in cyber financing.

One of the pioneer banks on the digital field is Union Bank of the Philippines (UnionBank), which realized the opportunities of the digital dimension long before the coronavirus disease struck the world.

UnionBank president and CEO Edwin Bautista told Daily Tribune’s Straight Talk forum the bank has well ahead anticipated the digital shift, and it is just a question of time before the Philippines also adopts digital transactions.

UnionBank Digital is one of six that the Bangko Sentral ng Pilipinas (BSP) awarded licenses as digital banks. They are Overseas Filipino Bank, a subsidiary of state-owned Land Bank of the Philippines; Tonik Digital Bank Inc. (Philippines); UNObank; Aboitiz-led Union Digital Bank; GOtyme, which is owned by the Gokongwei Group and Singapore financial technology (fintech) firm Tyme, and Maya Bank, the fintech arm of Voyager Innovations Inc.

Bautista said the realization in UnionBank came about when the Philippines was acknowledged as the short messaging service (SMS) or texting capital of the world.

“We were also the heaviest users of Facebook in the world.” he recalled.

Six years ago, when UnionBank was reviewing growth strategies, digital banking was brought to the forefront.

The situation was rife as the country is considered ahead in terms of digital adoption. UnionBank made the conclusion it’s merely a question of time for the country to embrace virtual commerce.

Six years ago, smartphones were just starting to become popular. “Digital banking then was very clunky that was not in step with user experience.

Normally, around the world, digital adoption needs a catalyst. For example, in Hong Kong, it was the octopus card that became popular in its mass transit system.

In India, transformation was spurred by its Central Bank’s declaration to demonetize high-value bank notes so people were forced to use money that they have been keeping such as “under the pillows.” Then, all of a sudden digital transactions multiplied.

In our case, the tipping point was Covid. For several months, Filipinos were confined to their homes.

Then came the blockbuster deal with Citi. The US-based bank was looking at a couple of things from its buyer, according to Bautista.

The first criterion was a bank which can successfully transfer or migrate Citi customers seamlessly.

“The new bank must replicate the product set of Citi in the Philippines, which are highly digital,” Bautista indicated.

“Most of Citi customers access their accounts digitally,” he added.

The last factor that Citi required was that the buyer will have the capability to take care of 1,700 Citi employees.

UnionBank clinched the deal. Bautista revealed that part of its offer was to invite all Citi employees to join UnionBank “under the same terms and conditions that they were enjoying.”

“We said, if you join us, you are going to join an organization that has a very similar culture.

Many of our executives and even board members are ex Citi bankers so we’re quite familiar with the organization and we actually built UnionBank that’s more or less patterned after Citibank because that is where most of us learned our banking,” Bautista explained.

Inclusive banking is becoming a reality through the digital shift since acquiring a bank account was made simple as against the usual practice of the monolithic institutions, which seems to have acquired the bureaucratic fat similar to that of the government in rendering services in slo-mo.

Those who managed to be a step ahead of the others will definitely be rewarded greatly through the now highly automated world.

“The bank has well ahead anticipated the digital shift, and it was just a question of time before the Philippines also adopts digital transactions.

“Situation was rife as the country is considered ahead in terms of digital adoption.