UnionBank of the Philippines: Upping the digital stakes
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Southeast Asia

UnionBank of the Philippines: Upping the digital stakes

This financial institution was the first in the country to put its money where its mouth was regarding a digital transformation – making it one to watch as it brands itself a disruptor too.


Edwin Bautista, president and chief executive of UnionBank of the Philippines

There are few bankers who get as animated about their job as Edwin Bautista, president and chief executive of UnionBank of the Philippines

Bautista, who has been in the job for almost four years, appears to be genuinely excited about the opportunities available to his bank. Those opportunities are being driven by one thing: technology.

“We were the first Philippine bank to make a big bet on digital transformation,” he says from UnionBank Plaza in Manila’s Pasig district. 

“Everyone talked about it, but we were the first to put our money where our mouth was. At first, we did it out of fear of digital disruption. Now we’re seeing ourselves as a disruptor too; and given our lead in this area [we have a chance to] leapfrog the competition.”

The transformation has taken many forms. UnionBank now has about 30 digital branches, which it calls ‘Arks’ and are being converted from old-fashioned physical branches. 

It plans to increase the total to 50 by the end of the year. Since 2017, the bank has had a policy not to open any new branches.

UnionBank has also invested in making all parts of its bank run on the same system, moving beyond a previous set-up where a hodgepodge of external and in-house software was used by each division. 

“Our system covers everything now,” Bautista says.


The firm has also made bets on blockchain and artificial intelligence. The bank now employs 100 blockchain developers, 40 data scientists and even 15 robotics experts.

“The internal buzzword is that we’re turning into an IT company with a banking franchise,” Bautista says. “Everyone wants to say that nowadays, but here it’s true.”

Much of its most recent investment has come through UBX, a fintech subsidiary launched earlier this year. 

The company was created to find a way to offer technological solutions to small and medium-sized enterprises, a growth market for Philippine banks. 

It has developed a range of products, including: GlobalLinker, which allows small businesses to find suppliers and potential customers; Akin, which adds a layer of security to mobile banking transactions; and the upcoming Loans Engine, which will use data to grant loans without customers needing to post collateral, fill in lengthy forms or even have a bank account.

There are two philosophies on digital banking, representing vastly different predictions about the future. 

A big part of what UBX has tried to do is serve what would traditionally be seen as rivals

Some bankers see digital as being a way to increase opportunities without fundamentally altering the nature of banks. In this view, banks will still be necessary; they will just do things differently.

Other bankers agree with an oft-repeated line from Bill Gates: “Banking is necessary, banks are not.” 

They acknowledge that the increasing use of technology – and the integration of banks into transactions in a more seamless way – is going to at the very least reduce brand loyalty for most of them. Bautista appears to subscribe to the latter view.

“Banking is going to be an invisible part of platforms and ecosystems,” he says. “How do we compete in that world? Simply put, we need to embed banking services in as many everyday touchpoints as possible. That’s the whole rationale behind the transformation.”

This explains why a big part of what UBX has tried to do is serve what would traditionally be seen as rivals. 

The Philippines has a large crop of rural banks that sometimes offer the only physical presence for those living outside the big cities. UBX wants to take care of the digital side of banking for these lenders so they can focus on expanding their client list.


UnionBank’s efforts have already been recognized. Bangko Sentral ng Pilipinas, the central bank, added a digital banking category to its annual awards this year. UnionBank won the award for ‘digital excellence’ as well as beating other universal banks when it came to ‘digital transformation’. Elsewhere in this issue, Asiamoney has once again recognized it as the best digital bank in the Philippines.

But could another Philippine lender beat UnionBank at its own game by making a similar commitment to digital banking? Bautista shows little obvious fear.

“It took us three years to really get the culture in place, and it’s the culture that takes time,” he says. “We do not fear competition nor digitalization per se as these are part of change. Rather, we are future-proofing our organization and our businesses to prepare for many new opportunities.”