UNIONBANK of the Philippines, Inc. is looking to join the online banking landscape as it looks to move forward with its digitization.
“I believe (we have) not yet (submitted an application for a license) but we intend to… I’m not so sure yet about the timeline,” UnionBank Senior Executive Vice-President and Chief Technology and Operations Officer Henry Rhoel R. Aguda said in an online briefing on Wednesday.
The central bank in November released a framework that distinguishes digital banks from other types of lenders such as universal, commercial, thrift, rural, cooperative, and Islamic banks.
The framework also allows traditional lenders to convert into digital-only banks as long as they can meet the minimum capital requirement of P1 billion for digital lenders within three years of the transition plan.
BSP Deputy Governor Chuchi G. Fonacier has said the central bank has already received one license application from a partnership of local and foreign firms, while four more parties have expressed interest. She said the Monetary Board has set an initial limit of granting up to five digital bank licenses.
Mr. Aguda said applying for a digital banking license or converting into a digital-only bank are viable options for the lender.
“Options are open. We have a team that studies the best option for the bank. It will also depend on who are the other competitors in that space,” he added.
Mr. Aguda said UnionBank clients are beginning to embrace digital transactions, noting 50% of their customers have used their app, website, and chatbot.
He said they are also seeing an average of 2,000 account openings done online daily, from the 2,000 monthly they saw before the pandemic that were mostly done through their branches.
However, Mr. Aguda said he doesn’t see all their clients shifting to digital banking.
“Maybe give us two to three years, maybe it will go up to 80% (of clients using digital banking) but it will never be 100% because again, there are customers who still want the personal touch,” he said.
As part of the bank’s efforts to boost its technologies, Mr. Aguda said they are also building the UnionBank Innovation Campus in Laguna inspired by Silicon Valley infrastructures.
“As soon as we’re back to normal, that campus is going to house our innovation projects as well as the data science institute, the blockchain institute, and accelerator. Some corporate offices will also be there,” he said.
UnionBank’s net profit rose 11% year on year to P4.2 billion in the third quarter of 2020. This brought its nine-month net earnings up 0.9% to P8.56 billion.
The lender’s shares slipped 70 centavos or 0.98% to P70.40 apiece on Wednesday. — L.W.T. Noble