Business World

UnionBank us­ing blockchain for more pro­cesses

- K.A.N. Vi­dal

UNION BANK of the Philip­pines, Inc. has adopted blockchain in more in­ter­nal pro­cesses to cut op­er­a­tional costs and fur­ther learn the tech­nol­ogy.

UnionBank Pres­i­dent and Chief Ex­ec­u­tive Of­fi­cer Ed­win R. Bautista said last week that the Aboiti­zled lender has launched “sev­eral” in­ter­nal blockchain ap­pli­ca­tions.

“In op­er­a­tions, we al­ready launched sev­eral in­ter­nal blockchain ap­pli­ca­tions. The goal is to put blockchain as much as we can in the in­ter­nal process,” Mr. Bautista told re­porters dur­ing the Philip­pine In­vest­ment Fo­rum in Taguig City on Wed­nes­day.

Blockchain is a dis­trib­uted data ledger which in­volves a large net­work of en­ti­ties where data is stored in “blocks.” The stor­age units are con­tin­u­ously up­dated and be­ing se­cured us­ing cryp­tog­ra­phy, mak­ing data man­age­ment and data-driven pro­cesses de­cen­tral­ized, tam­per­proof and more trans­par­ent.

Mr. Bautista added the bank in­tends to “blockchain­ize” more in­ter­nal pro­cesses to re­duce op­er­a­tional costs.

“We want to re­duce our costs. At the same time, it also helps us learn the tech­nol­ogy that we can now ap­ply for cus­tomers,” UnionBank’s chief ex­ec­u­tive noted.

In a pre­vi­ous press brief­ing, Mr. Bautista said “many” of its more than 700 in­ter­nal pro­cesses are right for con­ver­sion into blockchain such as check clear­ing, ac­count open­ing and funds trans­fer, among oth­ers.

UnionBank started to adopt the tech­nol­ogy in its in­ter­nal pro­cesses by putting its gen­eral cir­cu­lars and op­er­at­ing man­u­als into the blockchain, en­abling the more ef­fi­cient dis­tri­bu­tion of the ma­te­ri­als to bank em­ploy­ees.

Aside from this, the bank launched last quar­ter a clear­ing sys­tem that con­nects ru­ral banks through blockchain tech­nol­ogy. Dubbed as Project i2i, the clear­ing sys­tem stream­lines bank pro­cesses like in­ter-bank funds trans­fer, fi­nan­cial and ac­count­ing re­ports, re­mit­tance, know-your-cus­tomer process and branch lo­cat­ing.

UnionBank booked a net in­come of P1.78 bil­lion in the sec­ond quar­ter, down 17.2% yearon-year, on the back of lower miscellane­ous in­come.

The bank is set to of­fer up to 200 mil­lion com­mon shares via a stock rights of­fer­ing in Septem­ber to sup­port ex­pan­sion.

Shares in UnionBank closed at P83.90 each on Fri­day, down 10 cen­tavos or 0.12%.

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