Awards for Excellence 2018
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For many years Union Bank of the Philippines was a solid but unspectacular universal bank – decent but neither the biggest nor the boldest. Then it set about a new mission: to make itself the most digitally sophisticated bank not only in the Philippines but the region. That makes it Euromoney’s best bank for transformation in Asia this year.
UnionBank resembles an early-stage DBS, a bank it has studied closely in deciding how to reinvent itself. Like DBS’s Piyush Gupta, its top executives Justo Ortiz and Edwin Bautista are given to grand statements like “digitize or perish is the bank’s mantra” and “forge the future rather than watch it unfold.” Also like DBS, it has tried to go back to basics and ask questions like: what will be the role of the branch in the future?
UnionBank has answered this question with the creation of a new idea it calls The Ark, which changes a branch from being a place to process transactions to a place to get on board digital channels or to seek specific advisory services.
UnionBank calls its Ark a “third space”, designed to be a destination outside work, where creative tech ideas are encouraged not just from staff but from customers too and comes with a dedicated barista.
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| Justo Ortiz |
Staff are chosen for their ability to buy into this – they are called ambassadors and trained by the same group that works with Singapore Airlines staff – and are remunerated by their ability to drive customers towards digital banking. Customers fill out transactions on a tablet and route them straight through to these ambassadors, receiving digital receipts on email or SMS. Opening an account takes 15 minutes and – another DBS parallel – the bank makes heavy use of cloud-based platforms.
The bank has tried to take a leadership position on mobile assistants, robotics process automation, chatbots and interactive voice response systems. It has also pioneered the use of blockchain to reach rural banks.
We ask UnionBank the same question we put to DBS: what does this all do for financial performance? Return on equity stands at 12%, cost to income at 53.9% and return on assets 1.5%. All are among the better numbers in the industry, but one would expect them to get a lot better if UnionBank’s digital strategy is a success.
