Small and medium enterprises now get more support and assistance they need as more financial institutions offer a dedicated lending window for small and medium enterprises.
As one of the more technologically-savvy banks, the Union Bank of the Philippines came up with an innovation to empower SMES and micro-businesses through the UnionBank SME banking app.
Recognized by Asiamoney as the Philippines’ Best Bank for small and medium enterprises in 2020 for providing better funding opportunities to small businesses, UnionBank’s newest product aims to continue empowering SMEs to embrace digital transformation and unlock more opportunities for them to pivot, grow, and thrive in the now digital normal.
“Many of you might be surprised that we received such an interesting award when we are known as a cash management bank. In the last three years, we have been very active in the area of consumer banking or mobile banking, but the area of SME banking is relatively new to Union Bank. Four years ago when we were working on our strategic plan, we recognized that 99 percent of the businesses in the Philippines are small. So you’re talking of SMEs and MSMEs,” said UnionBank executive vice president for mass market Chut Santiago.
“And as the economy grows, it is important that this so-called backbone of the economy—the small businesses—grow together with it because if done properly, they could be the engine that will sustain the continued growth of the country,” Santiago said.
The new app underscores UnionBank’s primary goal of using digital expertise to extend more financial services to Filipinos.
The UnionBank SME app was developed as an all-in-one access platform that caters to every Philippine SME’s needs. To support these SMEs, UnionBank is providing an accessible and user-intuitive app that is tailor-fitted to how they want to run their business.
“As the country continues to recover, Philippine SMEs need innovative, convenient and secure banking solutions. Through our platform, we want to empower them to bank the way they want and according to what their business needs,” said UnionBank vice president for SME platforms Jaypee Soliman.
Through the UnionBank SME banking app, any business owner can open their own checking account online with ease and convenience. There is no fuss as the account will be available and ready to use within the same day sans the need to fill out any forms or visit a branch.
“I can tell you that this is the first of its kind in the Philippines, even in the region. Not very many banks have this kind of mobile app that is tailored specifically to the needs of SMEs. So from this app, they will be able to do their basic banking transactions. They can link to our platforms. They can open their online stores. They can track inventory. They can, in the next iteration apply for loans and so on. There are so many things that they can do so that the SMEs become even more efficient, and even more successful,” Santiago said.
The app also helps SMEs manage all financial operations with just a few clicks. UnionBank also offers other SME banking solutions including SeekCap and UnionBank GlobalLinker.
Through SeekCap, business owners can apply for a loan fast and hassle-free. Through UnionBank GlobalLinker, a one-stop-hub digital platform, SMEs are able to manage their inventory and their respective teams, gain more knowledge about the local landscape, as well as expand their network all in one place.
UnionBank said that in the Philippines, the banking sector was not spared as the economy went into a recession by the second quarter of 2020. Specific segments of the sector’s market continue to be in increasingly vulnerable positions. Some customers face temporary financial strain while individual and corporate borrowers face threats insufficient money.
It recognized that MSMEs were among the hardest-hit especially micro-entreprises with no means of financial support, but these businesses were also the most resilient as many of them successfully pivoted to digital commerce.
“So far, what we have done for SMEs is we’ve either allowed them to use the mobile banking app that we designed for individuals and for the bigger ones, we allow them to use the portal, which is our online banking system for corporates. This might have worked for some, but recognize after talking to SMEs, that perhaps their banking needs are a little more unique, and that and letting them use either the system for individuals or for corporates is suboptimal. So we decided to get our product development people to work on an app, specific to the needs of SMEs,” Santiago said.
He said that giving the small businesses a chance at financial inclusion will also boost the bank’s volume of transactions in the next few years.
Based from numbers from the bank’s business banking online, the volume of fund transfers pre-COVID, on a monthly basis, was 40,000. These spiked beginning March when the pandemic struck. By end-2020, transactions were already close to 1 million. Most funds transfers were initiated through mobile and online devices, and it continues to grow. Because of the intense surge, the bank expects transactions to hit 2 million in the next few months.
It is also on track to achieving its moonshot target of a million SME customers in the next five years. The bank has about 175,000 SMEs on board, not just in the bank, but within the different platforms like the UB GlobalLinker and another platform on UPS.
UnionBank realized that while a moonshot target of a million SMEs onboard is ambitious, it believes the task is doable. “At the end of the day, we’re all in this together, and we want to help all Filipinos be financially inclusive. We are a digital partner that Pinoy SMEs can trust and rely on amid any challenge,” Soliman said.