A CURSORY look at the Philippine banking landscape may look grim: 30 percent of the overall population remains unbanked with little or no access to the formal lending sector. Worse, many of them do resort to informal loans which bury them in insurmountable debt and restrict, rather than expand, their financial freedom. However, when you look at the area of digital payment, there has been significant and steady growth, as Filipinos, known for their resilience and adaptability, are looking for ways to gain financial inclusion, that can better their lives.
UNO Digital Bank, known as a full-spectrum bank, paves the way for Filipinos’ successful transition into this brave new digital world, through digital services that “make banking simple, better, and accessible,’ as described by the company’s Founder and Chief Executive Officer Manish Bhai.
Bhai, who is also the co-founder of the Singapore-based financial technology firm UNOAsia Pte. Ltd., shared his knowledge and insights with the Manila Standard on how digital transformation can break through the usual traditional barriers against financial inclusion.
First, he explained the reasons for his optimism when asked if this trend toward digital transformation, especially in the financial sector, is sustainable. “Yes, it will not only be sustained but will keep on increasing,” he affirmed. “I go back to our data which shows that the trendline is up and there is no reason to believe that this will change. Digital services in the financial sector will continue to grow by 35 to 55 percent. From credit cards to digital insurance, to digital apps, every parameter will grow in the Philippines.”
To accelerate this progress, UNO Digital Bank is committed to accompanying these newbie customers on their journeys to acquire digital financial footprints that will open up the world of online payments and responsible lending to them.
“Our vision is to elevate banking in the country,” Bhai continued, “and we have noticed a significant change in the behavior of our customers.
People are getting more comfortable with the idea and practice of doing online banking. At the same time, they do want to know more about cybersecurity and if their money is safe.”
As to these concerns, he addressed them, saying, “We are proud to say that we are completely built up on AWS cloud which is secure technology.
We have not cut corners when it comes to putting software for cybersecurity and security monitoring. We have a command center and a monitoring team which do all that.”
The trend toward digital banking is reflected in the increase in customers who are using UNO Digital Bank’s services. From 150,000 accounts in the last quarter of 2022, they have risen to more than 200,000 in the present. Probably one incentive to joining is that a new UNO Digital Bank account holder does not have to pay any fees; nor do they have to meet any minimum account balance requirements. The virtual card the bank holders receive is free. Another service that comes free of charge is doing fund transfers.
Bhai pointed out the rationale for all the free services: “Everything is free because we want to really encourage people who don’t have bank accounts or people who are underbanked, who had bank accounts but didn’t find any incentives to use the bank account to start operating and using UNO.”
UNO Digital Bank made opening accounts even easier in two ways. First, new customers can use the UNO Digital Bank mobile app to open their own individual savings accounts. Second, GCash customers can also avail of their own UNO account by clicking on their GSave feature; savings can be transferred from GCash funds to UNO Digital Bank accounts in less than 60 seconds.
He acknowledged that many of these account holders are “first-time bankers. What helps get them onboard is awareness and getting educated.”
Financial literacy, which also encourages customers to adopt digital banking and other platforms of online transportation, is a core value that undergirds UNO Digital Bank’s vision. The full-spectrum bank partnered with Singaporean organization Proxtera to launch the SME Financial Empowerment Program last year. The partnership’s goal is to teach and immerse 10,000 Philippine MSME’S in financial knowledge and techniques.
But far from being armchair seminars, the participants will be equipped and given support to use this learning to grow their businesses while being integrated into the overall banking system.
MSME owners who finish the training do get certified. Afterward, “they automatically get an UNO account and privilege rates of interest,” Bhai expounded. “Similarly, other initiatives which we have on the lending side are to offer loans both to the salaried class and self-employed through a combination of general purpose loans, conventionally financing loans, and working capital loans.”
“Our goal is to be the digital bank that understands ethical lending and responsible lending,” Bhai pointed out. Bhai further said that UNO Digital Bank loans are designed to teach borrowers responsible lending, making loans accessible and turning them into tools for growth and progress, instead of debt.
UNO Digital Banking will be focusing more on this area which will bring greater and safer credit inclusion in the next few months. They will also be reaching out to millions of Filipinos on the lending side and teaching them how to do transactions that are secure and empowering. Bhai hinted that insurance might be in the pipeline. In the meantime, the UNO NOW online loan feature is already available in the UNO app, this enables borrowers to apply for loans right within the app, and have them credited in as few as 20 minutes.
Throughout all these, they will be identifying areas where unbanked Filipinos remain—and experience hardship—in the informal banking space, and then encourage them to move to the formal banking space through digital platforms.
A strategy that combines the UNO Digital Bank app, a drive towards innovation, and partnerships with institutions like GCash can bring financial inclusion to “70 million people everywhere from the north of the country to the southernmost, east, west, anywhere—can have access. And that’s how we are creating this impact.”