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One of the greatest benefits of digital transformation for banks is that it can help them extend services across vast distances, including to customers living in remote locations.
The desire to provide a better experience to all customers regardless of their location was a key reason why Union Bank of the Philippines embarked on its digital transformation strategy five years ago.
UnionBank’s Senior Executive Vice President, Chief Technology and Operations Officer, and Chief Transformation Officer, Henry R. Aguda, says going digital was identified as a way to make everything easier for customers.
“We saw that only 1% of payments were accomplished digitally and we knew that something had to be done,” Aguda says. “Instead of building more branches, we focused on going digital for a better banking experience and to service more people.”
Partnering for Success
Huawei has been a key partner in UnionBank’s digital transformation, especially for achieving its vision of network transformation.
“We remain uncompromising and keen in choosing partners,” Aguda says. “We partner with organisations and companies that are aligned with our vision, security, and thrust for inclusive prosperity, and for being agile.”
Together, the two organisations have achieved incredible results. By the end of March 2021, UnionBank had onboarded 2.4 million customers to UnionBank Online – a 339% increase compared to December 2019, with just over a quarter of customers opening their accounts through the bank’s app. By March 2021, digital transactions had grown 380% over December 2019 to reach 6.6 million per month.
Digital transformation has also helped UnionBank’s workforce. During the pandemic UnionBank was one of the first banks to transition to work-from-home, enabling 86% of its workforce immediately.
Aguda says this would not have been possible without UnionBank’s network transformation and implementation of a next-generation security technology to protect employees outside the corporate network. He says the partnership with Huawei has allowed the network architecture to evolve to provide secured, 24/7 availability, six sigma reliability, and T+0 service delivery.
At the same time, Aguda says the pandemic has encouraged the Filipino people to be more accepting of banking online.
“The digital transformation that UnionBank started five years ago prepared us for the biggest disruption that the whole world is facing today,” Aguda says. “Our transformation has set our digital banking technology in place, paving the way for us to continue serving the public’s banking needs despite the limitations of these uncertain times.”
Aguda says one of the keys to successful transformation is to keep watch for emerging technologies and make the necessary preparations for them to flourish. UnionBank has woven many new technologies into its transformation, including artificial intelligence and blockchain, to create cost efficient and secure solutions for customers.
“It is about being lightning-quick,” Aguda says. “Be first to do it and do it well. Digital transformation is not an easy, one-time task. It is a continuous process of learning and adapting. You have to dedicate time, effort, and capital.
“That is why it is important that the organisations we partner with have the same level of commitment and mindset as our organisation,” Aguda says. “Again, it’s all about being lightning-quick, and Huawei has always been able to provide that same level of commitment and mindset to our organisation.”
And he says investing in the organisation’s people is also vital. By first focusing on training people to be ready for transformation, Aguda says UnionBank mitigated potential troubles before they arose.
“The valuable thing that this pandemic has taught us is that people just need to come together,” Aguda says. “To weather this crisis, we have to have a culture to learn. And never fear the unknown, because if we fear the unknown, we won’t be able to invent, innovate, and discover.”
An Inclusive Future
The transformation has enhanced UnionBank’s vision of creating a more inclusive organisation, which is brought to life through its fintechspin-off, UBX. Aguda says UBX’s financial platform i2i grew by 2,769% in signups, while its BUX payment gateway has grown 170% signups from just a couple hundred in 2019.
Also, UBX’s Sentro online shop builder grew its customer base by 241% after just one year, and its SeekCap online lending marketplace has grown by 800% users since 2019.
“UBX is working on a lot of projects geared towards building new technologies to improve the way we transact,” Aguda says. “In these projects, we aim to create the most efficient ways and provide better solutions to problems.”
UnionBank is also improving the financial landscape for entrepreneurs and smaller businesses by providing them with better banking experiences, and is entering the insurance market building a marketplace for insurance companies and consumers.
Importantly, Aguda says UnionBank is delivering on its promise of bringing modern financial technology practices to rural areas.
“The possibilities are endless, and we want to be there in every industry where digital transformation and innovation is needed,” Aguda says.