PHILIPPINE’S BURGEONING FINTECH SECTOR
The Fintech sector is a mushrooming industry and there is no sign of it stopping soon. The European Fintech sector is rife with Fintech groups looking to disrupt the banks and is packed with new, young innovative startups with multi-million dollar backing. The Asian Fintech sector is no different, although arguably less mature , however, it is rapidly evolving as a result of new age fintech companies and also because more traditional banks are striving to develop their technology departments to keep up with the new players. We talk to the award-winning UnionBank in the Philippines which recently won Best Fintech Banking Division Asia 2018 from our readers.
We talk to Arvie de Vera – SVP & Head of Fintech Group at UnionBan
EBM- Head of UnionBank’s Fintech Department — this position sure has its challenges, as well as advantages.What are the main goals for you as a Head of Bank’s Fintech Business Group? What skills would you say are the most important?
My main goal is to “Tech Up” UnionBank, our customers, and fellow Filipinos. In layman’s terms, we make technology accessible to the most sophisticated corporate client as well as to the most financially excluded Filipino in the remote areas. We make technology bridge the gap of financial inclusion. The most important skill in this role is to keep an open mind and be able to look beyond cognitive biases and stereotypes. A lot of what is happening in fintech is counter intuitive for banking, so we need to unlearn, learn, and relearn all the time.
EBM-UnionBank seems to always be one step ahead with technologies and in bringing news to its clients. “The leader in digital banking“, being “ahead of the age“ — these are just a few sentences often used to describe it. In your opinion, how did Union Bank manage to attain such reputation?
Culture is a competitive advantage. The UnionBanker is a smart banker- always challenging convention, “Magis” (do more, do greater) – with the customer at the center. So when new technologies come along we are the first to try and experiment with them. We are never satisfied with the status quo and are always finding ways to give services in a more efficient way. The technology is not our competitive advantage- it is the same available to all. Technology is actually the great equalizer. However, our competitive advantage comes from the culture of the bank. UnionBankers and their core values of Magis and Ubuntu (we are only human if we belong)- serving the community through smart banking: that is what really spells the difference.
EBM-UnionBank is known for being one of the more aggressive banks in embracing new technologies — like blockchain, and empowering rural banks through it, providing better access to universal banking products. In your opinion, what are the main challenges that UnionBank has to overcome?
Education, regulation, and adoption are critical challenges. First, we need to properly inform and teach people about the available technology. While it definitely is not plug and play, in its complexity people don’t need to understand the deep cryptography or coding. They need to be educated via use cases leading to cordial trust. Regulation further enhances that trust. We work closely with our regulators to ensure technology is a positive enabler and not a deterrent. Last but not least is adoption. It is the most difficult- we have seen so many wallet and electronic money providers over the past 20 years; all the bells and whistles, some so simple- yet adoption is very low. The customer has to be at the center- NOT the technology.
EBM-Which new fintech solution is the most important to the bank’s clients?
Our new mobile banking app is currently our newest and most loved by the clients. It has also won many regional and global awards. It is seamless, easy to use, simple- yet if you need to make QR code payments it is built in. It is also integrated with other third party financial technologies seamlessly. We have had so much positive feedback, but by no means resting on our laurels. This app is continuously improved based on feedback and thereby continues to be a co-creative process with our customers. Moreso, since we work on this in an agile manner and developed the app by ourselves- we can make changes and upgrades immediately whenever the need arises.
EBM -The blockchain technology is now moving towards Asia. This fact comes with certain challenges, as well as advantages for the Philippine banking sector. What new opportunities do you see at this point — both for UnionBank and Asia?
The World Wide Web is the internet of information, but is in a way, lacking and broken. Blockchain is the internet of value. There are so many possibilities with blockchain which have the potential to solve so many gaps in Asia and more so in the Philippines. In payments, healthcare, logistics, property, securities, identity- to name a few. Imagine it is 1995 and I told you the World Wide Web was used for email, chat and barely some e-commerce. Blockchain is the new internet.
UnionBank positions itself as the Philippine’s first blockchain-enabled bank. It is also the first Philippines’ bank to join Visa B2B Connect — a cross border business-to-business payments platform of global payments technology company Visa, using blockchain architecture .In your opinion, was it difficult to establish a culture of innovation at UnionBank? What are the main challenges for the bank’s fintech department?
Innovation is in our DNA. It isn’t only concentrated in the Union bank Fintech Group. It is present in the worldwide bank system. We didn’t wake up one day and say, “let’s do fintech!” In other words, we were already doing “tech-fin”. UnionBank, has for decades, been building in-house financial technology solutions for corporate clients and for internal use. It is easy to do when you are servicing an industry or segment- but for retail it is difficult to justify. Consequently, we focused primarily on corporate back then, but if you look back we were winning the Cash Management and Transaction Banking innovation awards as well. Now with the dawn of fintech, there is no need to build the entire technology yourself! You can partner and collaborate with so many financial technology partners.
EBM-One of the aims for UnionBank is to simplify and reduce the cost of cross-border payments for 500,000 small and medium enterprises in the country. How successful has this strategy been to this date?
The moonshot is actually 50 Million customers and 1 million small to medium enterprises (SMEs). This foundation has been set and is at the execution stage. We are running on all cylinders and actually finding ourselves having to build new capacity to make this happen. This has rallied the entire bank- front end sales, back end operations, top to bottom management and officers, and everyone in the middle. UnionBankers are committed to this moonshot and the building, experimentation and innovation continues in all parts of the bank.
Whn it comes to innovations and fintech, the future and what it will bring is the most interesting topic. Can you say a few words about it as well? In your opinion, what does the future hold for Philippine banking sector? And UnionBank — what will it look like in the next 10 years?
I like the quote of our President and CEO Edwin Bautista. “If you wait for perfect circumstances before you act, you will run into perfect competition. We really don’t know what the future of banking will be, but UnionBank will be there, transformed into the best version of ourselves.”
You won Best Fintech Bank Asia 2018 from our readers. There was a huge amount of competition. How do you feel about this huge achievement and why do you think you won this award?
UnionBank is grateful and humbled by these awards. There are many great digital banks in Asia and those very notable with Fintech Banking divisions. It is an honor to be amidst great company. In the age of technology- it isn’t any more about the largest and the biggest. Rather, it is about agility and flexibility as critical differentiators. In an industry where our very existence is at stake- those with the mindset, willingness, and ability to act- those nimble enough- will survive into the future they themselves co-create.