"Welcome to the age of fintech."
If you deposit money or make a payment through a UnionBank branch, chances are the bank teller won’t give you a receipt or hard copy of the transaction.
UnionBank has gone digital. Which means paperless, cashless, wireless. No human contact, if possible. Which means speed.
Have you ever done a teller transaction with a BDO branch? If you are not a senior citizen, it can take you about an hour before the teller can attend to you. The lines are as long as the lines buying a cheap kilo of rice.
At UnionBank, the transaction is handled by a robot or a computer, if you like. The robot uses artificial intelligence, which means the computer is not stupid. Unlike us, humans. The teller will text your phone to confirm your deposit or payment transaction.
UnionBank, under President Edwin Bautista, believes it must go digital or perish.
Otherwise, its business will be taken away by the likes of Jollibee, McDonald’s, 7-11, LBC Padala, Palawan Express, or any entity which has a network of outlets that attends to customers at the corner. These outlets don’t have what they call brick and mortar facility, like a bank branch. They can handle bank transactions without being a bank and without having bank vaults.
UnionBank must have been doing well with digital. Its No. 2 man, Eugene Acevedo, has been pirated by Helen Dee’s RCBC to become its president. Eugene’s forte is digital banking. So expect RCBC to go digital too to catch up with its peer group rivals.
This is the era of financial technology or fintech.
UnionBank has seen the tremendous improvements in the Philippines’ digital environment—67 million Filipinos having access to the Internet, 61 million Filipinos with mobile phones, and a 403-percent increase in Internet speed from 2017.
How does a bank like UnionBank cope, then? Well, join the fun. So it has what it calls Total Digital Transformation. It has two aspects:
“Tranformation A” is becoming the Best Digital Bank while “Transformation B” is becoming a “Fintech that happens to have a banking license.”
This dual transformation is needed both to ensure: 1) UnionBank’s relevance as banking and financial services expands with many new players and 2) that UnionBank can best reach out to more unserved and underserved communities to achieve inclusive prosperity (so that “all boats rise, as the tide rises”). Note that at least 60 million Filipinos do not have a bank account or have no access to a bank.
In its pursuit to become the best digital bank, UnionBank introduced several innovations for faster, safer, efficient and convenient banking operations.
One is The Ark, now almost two years old and is claimed to be the Philippines’ first fully digital bank branch. It has changed the landscape of branch banking in the Philippines.
The Ark on Ayala Avenue has the look and feel of an airline VIP lounge. There are no tellers, only ambassadors. There are no counters, only a counter dispensing coffee, tea, and “me”—the beauteous ambassador. Since there are no tellers, only coffee or tea, you do things yourself. That is called self-service—by going to a machine that looks like an ATM machine.
Self-service transactions speed things up. Since The Ark’s opening, cash deposit through the machines reached 6,300 transactions or an average of 570 per month with a volume of P150 million or P13.6 million per month.
Other transactions like account opening, product application, check encashment, request for manager’s check, telegraphic transfer, bank certification, well, are still handled by tellers plus the machines.
Thus, an account opening is speeded up from one hour before digitization to 15 minutes after digitization.
In terms of accounts opened and average daily balance, The ARK had, by end 2018, over 1,000 bank accounts opened with almost P200 million in average daily balance. This is six times more than what other new branches have opened.
UnionBank has since launched 20 more ARKs nationwide from the first ARK at the Insular Building along Ayala Avenue in Makati. By end-2019, UnionBank targets to have 46 ARKs across the Philippines.
Another innovation is the EON or selfie banking. The machine has a camera. It records your face and your physical features, including the color of your hair, eye and eyelids, the shape or your nose or lips. It records your fingerprint. It is called biometrics. These things are done already by your cellular phone. So why not a bank machine?
Your biometrics are fed to more computers which then learn of your credit record—if you have money, if you have assets, or if you have tendency not to pay loans or debts on time. The machine also knows your personal background—how many wives or girlfriends you have, if any.
Meanwhile, UnionBank’s Open Banking Feature allows customers to use any Visa/Mastercard debit or prepaid card to enjoy seamless online purchases.
The bank now allows you to open a bank account without submitting documents or going to a physical bank branch.
The bank has 24/7 access to the EON Starter Kit, the first prepaid card in the Philippines to be available in convenience and online stores.
Last year, EON partnered with PeraHub to provide agency banking and bring financial services to rural areas. And currently, UnionBank is also creating synergy with the rural banks that it has purchased by providing the EON platform to these banks.
In the future, UnionBank will behave like the central bank itself. It will issue its own currency. That currency has no printed bills. It is just embedded in the innards of a computer. Its records are handled by a so-called block chain.
What is block chain? It is like an accounting record where everybody has access to. Imagine your Tagalog or Bisaya broken down into binary numbers I and O and you use those binary numbers to create a language everybody understands and recording the transactions paperless, cashless, wirelessly.
I don’t understand it myself. That’s the beauty and mystery of going digital. Nice, di ba?
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