A technology-first, digital-only bank has achieved major milestones in just five months of operations—something that would take traditional financial institutions several years to accomplish.
“In our first five months since launch, we have achieved P3.8 billion in deposits and P4.2 billion in loans. Our incredible growth in such a short time is due to our ecosystem strategy of working within the Aboitiz Group where we have a breadth of historical data and deep value chain involvement,” says Arvie de Vera, the co-founder and chief executive of UnionDigital Bank, a subsidiary of Union Bank of the Philippines and a part of the Aboitiz techglomerate.
De Vera identifies UnionDigital Bank as the only digital bank parented by a universal bank listed in the Philippine Stock Exchange with over 40 years of history in banking. “We are grandparented by the Aboitiz Group, a 100-year old techglomorate, who has long championed innovation as part of its lifeblood and is also still a hungry start-up,” he says.
“Being part of the Aboitiz Equity Ventures Group, with a goal of advancing communities for a better world, we, at UD, translate this into championing our ‘Tech Up Pilipinas’ advocacy further in pushing for a more financially inclusive Philippines. At UD, we have the responsibility to help enable Filipinos with better banking, leveraging on tech, innovation, and proper regulation,” he says.
“This is why we established UnionDigital Bank. We want to fulfill our mission to make a Tech’d Up Philippines a reality. We want to maximize technology and democratize financial services. Why should farmers not have access to the best-in-class financial services on a mobile phone? Technology allows us to serve these people because it brings down the cost to serve and make financial innovations accessible to all. We want to create avenues that will enable economic self-reliance, growth, and prosperity tothe underserved segment – paving the way for a Tech’d Up Philippines,” says de Vera.
He says while killer apps seem to be at the top of everyone’s list, UnionDigital Bank understands that the underlying technologies behind basic banking functions such as savings and loans are the first and most important step.
“Our aim is to enhance those fundamental functions and ensure their accessibility to a broad range of Filipino communities,” he says.
Prior to leading UnionDigital Bank, de Vera established the financial technology group of UnionBank in 2016 which pioneered industry firsts in blockchain use cases. He also championed open finance through UnionBank’s award-winning global API Marketplace and led the initiative which resulted in the creation of UnionBank’s fintech, UBX, where he also sits as board director and member of the investment committee.
De Vera’s exposure to banking, marketing and media allowed him to see the rise of fintech, which is a fusion of tech startups and banking, as an opportunity. “My journey began in digital banking by choosing to partner with and help develop these promising young fintechs,” he says.
“Anyone aspiring to be a digital banker should embrace change and value collaboration. There is always a better way to do things, and working with others and learning from one another is the surest way to find the next solutions,” he says.
Next frontier
De Vera labels UnionDigital Bank as the next frontier in tech-ing up banking in the Philippines. “We believe it is the fastest and surest path to a better quality of life for all Filipinos. Each and every one of us should have access to the best-in-class standards that are available to the most advanced nations in the world—but in order to achieve that in the Philippines, we need to find the right way to implement these innovations within the Filipino context,” he says.
“That is why we established UnionDigital Bank, with a mission to make those implementations a reality. Most banks today recognize that need, but they come from traditional banking backgrounds and have been playing catch-up by upgrading components of their operations piece by piece,” he says.
He says while some banks are trying to become technology companies in part, UnionDigital in unique as it is already a technology company since inception. “This kind of tech-first, digital-only bank is a necessary evolution to bring about the changes we wish to see in the finance and technology standards of the Philippines,” he says.
“Ultimately, banking must be embedded and open. We envision banking, not as a cumbersome service that people need to go out of their way to access, and that only the elite few can truly take advantage of. That is how it is today. Instead, banking should be seamless and integrated into every service that regular people use day to day. The future of banking is through technology and data. These will allow banking to become the embedded service it should be,” says de Vera.