Union Bank of the Philippines' president talks about their three-point digital strategy

As part of its pursuit to become a digital bank, Union Bank pioneered ‘selfie banking’ in the country.

Edwin R. Bautista serves as president and chief operating officer of Union Bank of the Philippines, and he has more than 25 years of experience in the banking industry. He will assume the role of chief executive officer effective January 2018.

Since joining UnionBank in 1997 as senior vice president, he has headed the Bank’s Transaction Banking, Commercial Banking, Operations and Consumer Finance centres. In 2006, he served as president of International Exchange Bank until its merger with UnionBank. Prior to UnionBank, Bautista worked for leading multinationals such as Citibank, American Express and Procter & Gamble.

In this exclusive interview with Asian Banking and Finance, Bautista talks about UnionBank’s digital transformation and how he ensures that the Bank completes the journey without anyone being left behind.

Given the big push for digitalisation in the financial services industry across the region, how is the Philippine banking sector affected?

Digitisation has led to dramatic changes in financial services throughout the region. The rise of new technologies and competitors has prompted financial institutions, including Philippine banks, to rethink many of their strategies. From our perspective, the main threat to local banks, amid the ongoing liberalisation of the banking industry, is the entry of fintechs and "all-digital" foreign banks in the Philippines.

Thus, here at UnionBank, we are pursuing a three-point strategy to digitise our operations and bring us onto a level playing field with these new players. The first plan is to digitise the whole Bank.

The idea is we want to be fully-digital, “as-fast-as-possible”, in terms of operations and processes.

The second plan is to launch UnionBank’s own “digital bank” by using the “new-and-improved” EON brand. EON will drive to be the “Philippines’ first” in many user-experience areas. An example of this is it's “K.Y.C. by selfie feature” – a first in Asia – which we have coined as “EON Selfie-Banking.” By so doing, we believe this will help diminish the “wow factor” that foreign all-digital banks can otherwise bring in.

The third plan is to engage with fintechs as partners, instead of treating them as competitors. Especially when they get bigger and scale-up, they realise that they need a partner bank to assist them or else their costs can easily get out of hand. Here is where we can step in as their “backroom,” given our ready infrastructure to handle this scale.

Please tell us a little bit about your most recent initiatives around digital and mobile banking.

We launched the new UnionBank Online mobile app last August, which allows our clients to bank from the comforts of their home, office or wherever they are.

Signing up would no longer take days but only seconds. Our clients can use any of their UnionBank accounts to sign up, and there’s no need to visit a branch or ATM to activate their account.

Also, our clients can now access and manage their deposit accounts, credit cards, loans and investments through one online account. They can also transfer funds, pay bills, schedule transactions in advance and purchase airtime load.

They can even customise their online account. They can manage limits, one-time passwords, arrange accounts on their dashboard or hide accounts that they don’t want to see. They can even upload a profile picture.

UnionBank Online is more than an improvement to the look and experience of our current banking facilities. It has a suite of features that are not seen in our competitors. Enhancements to UnionBank Online for the succeeding months will enable social payments and personal financial management tools.

This is certainly an essential step in our move to become a digital bank.

What do you consider as your biggest achievements so far as the President and COO of Union Bank of the Philippines? How has the company progressed under your leadership?

So far, the achievement that I am proudest about is the “Best Company to Work For” award from the Asia Corporate Excellence and Sustainability Awards which we received last year.
Banking is a people business and an engaged employee, an engaged workforce delivering such great service, which in turn translates into an engaged and loyal customer group is what we really aspire for.

Also, I am equally proud to say that UnionBank achieved a record-high profit last year. The Bank and its subsidiaries posted an all-time high net income of P10.1 billion.

All of our major business segments contributed significantly to the bottomline.

This result validates the Bank’s successful pivot to a full service and consistently profitable retail bank.

What are your key business philosophies?

Everything starts and ends with the customer. Excellent customer service will always be the key to a company’s growth and stability.

This is precisely the reason why here at UnionBank, we constantly seek ways to innovate and improve our products and services to ensure that we offer nothing but the best to our clients. Of course, we also make sure that we have the best players to execute our strategy.

May I point out that we do take care of our people inasmuch as we take care of our customers.

In fact, amid the digital transformation that the bank is undertaking, we will do our best so that no one gets left behind. We are “future-proofing” our people, meaning, we are preparing them in such a way that they can move seamlessly from a job that is disappearing into a new job that is emerging.

What three goals are you focused on in the next 12 months?

Now that we are in the second half of our FOCUS 2020 “decade-long” roadmap, we have already gained significant traction in achieving our strategy of shifting our business model towards retail businesses and recurring income. After all, a key “FOCUS 2020” objective is to become a great retail bank.

We have set ambitious targets in terms of market penetration. The ultimate gauge for us to say that we have reached this objective is we are able to bring or extend financial services to the unbanked and underbanked Filipinos who have a “smart” mobile device.

We believe that just “opening up branches” is not the solution to this goal, which is why part of our digital transformation strategy is to provide the right products and channels needed by the unbanked and underbanked segments.

What is the significance of being named the Domestic Retail Bank of the Year to Union Bank?

This award is another testament from our industry peers to the Bank’s and UnionBankers’ ability to constantly develop creative, innovative and customised solutions that are uniquely suited to our customers’ diverse and ever-changing needs. More importantly, this prestigious award also signals that we are on-track to “Make Da Diff”, or make that critical difference in the lives of our customers by elevating their lives and fulfilling their dreams.

We hope to become an even more effective enabler of inclusive prosperity, which is also the stated goal of the national government. Specifically, we will aim to bring in as many unbanked Filipinos as possible into our ecosystem since – based on research – more than 80% of Filipinos are unbanked. This will be anchored on our digital transformation initiatives.