The Bangko Sentral ng Pilipinas approved on July 15 the application of Union Bank of the Philippines for an authority to establish a digital bank.
UnionBank said in a statement the digital bank would be incorporated as Union Digital Bank (UnionDigital), a wholly-owned subsidiary.
This makes UnionBank the first publicly-listed Philippine bank to be granted a digital banking license by the BSP.
UnionBank president and chief executive Edwin Bautista said the digital bank is going to be the principal vehicle for UnionBank "to service and support the lower end of the market—the unbanked. This is our vehicle for inclusive prosperity.”
Bautista said the digital bank approach allows UnionBank to create a digital bank from scratch, providing an environment where new technologies can be developed using the best technology available out there.
He said it is more difficult to do this in the existing bank as it is like changing the engine while the car is running. With this approach, they have a chance to pause and re-create the ideal digital bank that will run differently having a different set of engines, he said.
“If it works for the digital bank then, in the future, we might be able to consider applying the same engine to our mother bank,” Bautista said.
BSP Governor Benjamin Diokno, in a speech at the 4th BSP Webinar Series “The Age of Digital Banking”, cited the importance of the BSP’s Digital Banking Framework in bringing the Philippines a step closer to reaching its strategic objective.
“The BSP has long recognized the role of digital platforms in affording greater efficiency in the delivery of financial services and products. We also see the recent issuance of the Digital Banking Framework as an integral building block in promoting and enabling regulatory environment that fosters responsible innovation, promotes cyber resilience and contributes towards advancing the digitalization of the financial sector," Diokno said.
UnionBank continues to sustain its digital leadership as it was named “Digital Bank of the Year” in January this year by The Asset Triple A, holding the distinction of being the first and only Philippine bank to receive the award for four years in a row.