Union Bank – Brochure 2020

UnionBank – Betting on digital In association with

UnionBank – Betting on digital W E E X P LO R E H O W U N I O N B A N K P U T S I T S M O N E Y O N D I G I TA L T O E S TA B L I S H I T S E L F A S A T R U E BANKING LEADER IN THE PHILIPPINES

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D al e Bent o n K i r on Cha vd a

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D

igital disruption and the concept of digital transformation is a conversation being

had the world over, in every industry.

Organisations and individuals are, and have been for a number of years, investing in transformation in order to embrace the new digital world. This, understandably, can cause fear and reticence as these businesses face numerous challenges and shifting market dynamics that force them to play their hands in fear of losing out to competitors and worse, losing relevance to customers. In the Philippines, one such company has grabbed the reigns of digital transformation and digital banking and established itself as a true leader in the information age. UnionBank is one of the largest banking institutions in the Philippines and has continuously positioned itself as a leading digital bank to best serve the growing needs of Filipinos everywhere.

The company’s very own President and Chief Executive, Edwin Bautista, said it best himself when he proudly acknowledged that UnionBank is leading the way in the digital conversation in the Philippines. “We were the first Philippine bank to make a big bet on digital transformation,” says Bautista. “Everyone talked about it, but we were the first to 4

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

Through its digital transformation strategy, UnionBank continues this big bet on digital transformation as it looks to deliver superior customer service to the digitally enabled customers of today, and play a key role in the Philippines’ push to be a G20 country by 2050 and truly power the future of banking.

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Through a digital transformation

OutSystems is a software company

service you want,” says Mark. You

strategy, Union Bank, one of the

that provides a low-code platform

can do everything by yourself or

largest banking institutions in the

for rapid application development,

you can bring in people to help you.

Philippines, continues to place a

enabling companies to embark on

Be it servicing your car, learning to

great bet on digital transformation

a digital transformation journey.

speak French, or wanting to become the best painter in the world. You

as it looks to deliver superior customer service to the digitally ena-

“Our relationship with Union Bank

can do it naturally or you can have

bled customers of today, and play

is that we are a system supplier

training to help you do so. That’s

a key role in the Philippines’ push

who can provide the capability for

what we do as a company and we

to be a G20 country by 2050 and

them to transform their business,”

are very successful in doing it.”

truly power the future of banking.

says Mark Weaser, Vice President APAC, OutSystems. “We do this

Through the use of Technical Suc-

In recent years, the banking and

by A, training up their employ-

cess Manager assigned to custom-

financial industry within the Phil-

ees on our technology, B, better

ers like Union Bank, OutSystems

ippines has changed dramatically

enabling them, and C, support-

enables a constant dialogue to of-

and in turn, this sparked the initial

ing them and encouraging them

fer mentoring and problem solving

discussions around digital trans-

to build all the applications they

and white boarding. This allows

formation for UnionBank. This also

need to move archaic systems

OutSystems to align itself fully with

falls in line with the broad ambition

across to a fast, modern system.”

the customer and be seen as more than a supplier or a partner. “Each

of the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philip-

This relationship is typical of the

customer has a different journey

pines, that looks to raise the volume

way that Outsytems works with its

and different objectives, but we’re

and value of electronic transactions

customers. Customers such as Un-

not just trying to push our prod-

in the country from its present

ion Bank, work with partners under

uct. We try to align ourselves and

“negligible” level of 1 percent of

the OutSystems umbrella to move

try to be the customer,” says Mark.

all transfers to 20 percent by 2020.

forward, adapt and adopt the low code technology. OutSystems goes

“We ask ourselves, are we a suppli-

A key part of this transformation

beyond the traditional perspective

er who’s just trying to persuade a

saw Union Bank look to redefine its

of a strategic partner in that it deliv-

customer to buy in more products?

customer service function through

ers more than a service, by bringing

No, we’re trying to understand why

technology enablement and imple-

people into the business to work

customers want those products,

menting a culture of innovation. This

closely with Union Bank and to train

and why they want these features

is where Union Bank’s relationship

them and support them as they im-

and what benefit they’ll get from

with OutSystems comes into play.

plement the technology in order to

it. That’s what makes our rela-

Ranked as one of the world’s lead-

realise the true value of it. “We can

tionship with Union Bank so suc-

ing cloud employers and trusted by

do as much or as little as is needed.

cessful, because we are aligned.”

thousands of customers worldwide,

It’s the same as buying any level of

“ I T ’ S A L L I N T H E S E R V I C E O F W H AT G OT U S H E R E , W H I C H IS OUR FOCUS ON OUR P E O P L E , O U R L OYA LT Y TO O U R C U S TO M E R S , A N D O U R A B I L I T Y TO W O R K TO G E T H E R A N D E N J OY T H E S C A L I N G OUT PROCESS.” —

HENRY AGUDA, CTO, CTOO AND CHAIRMAN OF UBX

In recent years, the banking and financial industry within the Philippines has changed dramatically and in turn, this sparked the initial discussions around digital transformation for UnionBank. This also falls in line with the broad ambition of the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, that looks to raise the volume and value of electronic transactions in the country from its present “negligible” level of 1 percent of all transfers to 20 percent by 2020. “The banking industry in the Philippines is dominated by maybe a few major players holding the largest market 8

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share in terms of traditional banking. And

financial services is now proving that it

there has been little innovation, I would

can be an easy experience and that it

say, prior to the entrance of fintech into

can be available to most, if not all.”

the country in recent years,” explains Ana

At the very start of the transformation

Delgado, Chief Customer Experience

journey, UnionBank recognized that it

Officer and Head of Consumer Finance at

needed to redefine its customer service

UnionBank. “The introduction of fintech

function and its technology enable-

has really forced the banks to rethink

ment. This is where Delgado joined the

their strategies and rethink their rele-

business, as she was asked to estab-

vance. What they’ve changed in the

lish a customer experience practice in

customer’s mind, is this notion that bank-

the bank. Over the last four years, this

ing has to be something tedious and that

experienced team has evolved dramat-

is difficult and not everybody is eligible

ically from an initial roster of four to

to be part of the banking system. They’ve

24 people that now covers all things

democratized payments, so access to

digital including UX, UI, marketing and w w w. t h e i n t e r f a c e . n e t

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YEAR FOUNDED

1981

REGION HQ

Pasig City, Philippines

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web development. Working alongside

expertise of existing people within the

Delgado and driving this transformation

business. So, it’s not like we came in with

is Dennis Omila as Chief Information

the mentality that we’re the ones that are

Officer and Henry Aguda as CTO, CTOO

going to transform you,” he says. “We

and Chairman of UBX - UnionBank’s

needed to collaborate and respect the

fintech division.

depth of the experience of people within

While Delgado has worked with

the bank, but at the same time, lever-

UnionBank for a number of years, both

age on things that we’ve been exposed

Omila and Aguda come from the telco

to in our respective industries. We really

industry, something that Delgado thinks

provided a lot of respect to the different

speaks volumes as to need to bring

perspectives and we made use of that.”

different experience and skill sets into the organization as it looks to cement its position as a true digital leader in banking. “When we started the digital transformation, we actually recognized that since our competitors were fintech and technology companies, we needed to change the talent set in the bank and we couldn’t do this on our own,” says Delgado. “Hiring people from various background, specifically telco, the tech companies, data analytics was crucial and it continues to be crucial in our journey because if you think like a banker, or if we continue to just think like bankers, we would never take the risks that we’re taking.”

Omila agrees with this sentiment: “When we came in as new talents, there was a great deal of respect for the experience and depth in terms of the 12

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Aguda leads the fully owned subsidiary

and changing the expectations of our

called UBX. UBX, as Aguda describes,

customers for banking,” she says. “We’re

is “technically a tech company”.

trying to rewrite what banking means.

Incorporating another company, UBX

Frankly, in our customer’s eyes, banking

acts as UnionBank’s technology arm, and

is a tedious and painful experience and

this subsidiary is made up of people and

we also believe that it does not have to

talents from a number of different indus-

be. In fact, it can be a delightful expe-

tries and this allows the company to take,

rience and that’s what we’re trying to

as Delgado states, “calculated risks.”

achieve and UBX and the varied skill sets

“When I say risk, I mean the risk that

in our organization enable us to do that.”

involves changing the business model

These calculated risks that UnionBank

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can afford to make reflect a changing

200+ digital openings a day and that

customer. While the company looks

makes us a major contributor to the BSP

to break that mindset of tedium with

goal of increased digital transactions by

regards to banking, this is a tedium that

2020.” Being the only one to introduce

has developed through digital enable-

these capabilities represents the compa-

ment. The technology landscape within

ny’s approach to innovation and what

the Philippines has changed and so

truly sets it apart from its competitors.

customers are more connected than

Through the advent of UBX, UnionBank

ever before. As Aguda notes, it is no

can look at exploring the fintech disrup-

longer a challenge of overreach for

tion a little differently. No longer will the

banks, it’s now a challenge of qual-

organization, understandably, look at

ity. “Mobile phone penetration rate is

fintech organizations and try to incorpo-

about 110%, meaning more people have

rate or almost copy their best practises,

multiple phones. The total phone base

they can use their varied expertise and

in the Philippines could be around 110

“do one better.”

million, with around 75% of those being

A transformation is a journey and an

smartphones. More people are enjoy-

organization needs to establish a strate-

ing connectivity and smartphones,” says

gic roadmap with clear goals and

Aguda. “What that also means is that

desired outcomes, this is only

more people are looking towards online

natural. With UnionBank, things

banking, convenience banking as well,

were a little different. Aguda

so that they can do most of their transac-

believes that the organiza-

tions with their device.”

tion is “strategy in motion”

This has seen UnionBank introduce

and works towards a broad

digital account opening capabilities, the

statement and a flexible

only bank to do so in the Philippines,

approach that enables

something that has been well received

innovation and challeng-

from customers. “UBP is the only local

ing new ideas. That broad

bank that introduced the digital account

statement is to provide digi-

opening and so far it’s been a huge

tal banking services for 50

success on our end,” says Omila. “Only

million customers. Considering

recently we were averaging close to

there are around 100 million

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“ W E N E E D E D TO C O L L A B O R AT E A N D R E S P E C T T H E D E P T H OF THE EXPERIENCE OF PEOPLE WITHIN THE BANK, BUT AT T H E S A M E T I M E , L E V E R A G E O N T H I N G S T H AT W E ’ V E B E E N E X P O S E D TO I N O U R R E S P E C T I V E I N D U S T R I E S . W E R E A L LY P R O V I D E D A L OT O F R E S P E C T TO T H E D I F F E R E N T P E R S P E C T I V E S A N D W E M A D E U S E O F T H AT ” —

DENNIS OMILA, CHIEF INFORMATION OFFICER

people within the Philippines, and a total banking population of around 20 million, this broad statement highlights the ambition and confidence in its own abilities to achieve it. This confidence stems from the very top of the business as it challenges each and every person within the business to push harder.

“It’s not so much the number, it’s the aspirational part of trying to think out of the box,” says Aguda. “Our chairman’s philosophy is, if you set a target that is beyond reach then people will start thinking out-of-the-box.

Our strategy is around capturing those customers, but it was focused on making our people aspire for something more in order to achieve that.” The initial phase of the transformation strategy saw the company work to establish this culture of innovation first and foremost and only then could it look to data consulting and enterprise architecture which guided its technical people on what to build in line with what the customer wants, and the business requires.”

Make no mistake, innovation has been a clear competitive edge for UnionBank since the turn of the century. w w w. t h e i n t e r f a c e . n e t

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This transformation journey is one of taking that innovation curve further. “We launched the first internet banking in the Philippines, we had the first debit card,” says Delgado. “So, innovation has always been a huge part of who we are and how we compete in the market and differentiate from the other banks. This innovation comes from our agile mindset – from the top down we work in an agile way where teams and leaders are empowered to make their own decisions, so it allowed us to really be faster, be more nimble. It’s like a start-up mentality.”

In discussing transformation and digital disruption, it can be easy to forget that ultimately the key driving force for all of this is and always will be the customer.

So how does changing a culture, driving an agile and innovative and empowering workforce mindset translate into customer success? UnionBank is all too aware of the shifting dynamics of its customer base. Some will be digital ready and demanding of newer channels, others may be reluctant to embrace technology. Delgado highlights that when building its new customer experience, UnionBank was very cognizant towards this. UnionBank hasn’t removed branches, rather it has invested in transforming the experience of the branch as well as the digital channels in service of delivering the best customer experience. It has done this through investing in three pillars: physical, digital and human channels.

“By investing in these pillars, through human touchpoint technologies and digitizing the branch experience,” says Delgado. “We’re embracing the fact that there are some clients who will take more time and need more assistance to move on to digital channels or 16

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“ T H E I N T R O D U C T I O N O F F I N T E C H H A S R E A L LY F O RC E D T H E B A N KS TO RE T H I N K T H E I R S T R AT E G I E S A N D R E T H I N K T H E I R R E L E VA N C E ” —

ANA DELGADO, CHIEF CUSTOMER EXPERIENCE OFFICER AND HEAD OF CONSUMER FINANCE AT UNIONBANK

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not at all, and catering to the wide range

easy journey ahead. “I think the key is

using customer experience approaches.”

really to have the values and elements

The future of UnionBank is one of

that allows us to get there,” he says. “It’s

opportunity. The company is targeting

about continuing to embrace change,

an ambitious 50 million banking custom-

having a learning attitude and being

ers in the coming years and it has and

collaborative.”

continues to invest in the technology and

This learning attitude and collaborative

the culture in order to get there. Omila

approach will see UnionBank continue to

recognizes that it’s not going to be an

invest in technologies and enable greater innovation but for Aguda, it’s about remaining focused. “It’s all in the service of what got us here, which is our focus on our people, our loyalty to our customers, and our ability to work together and enjoy the scaling out process,” he says.

“Ultimately, at the end our north star, our compass is really the customer and whether we are able to provide value and experience to them. That’s what will allow us to understand the direction they’re going to take and not to digress from that. We must keep the customer at the heart of what we do.”

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