UnionBank deepens use of blockchain technology
Catherine Talavera (The Philippine Star) - April 28, 2018 - 12:00am

MANILA, Philippines — Union Bank of the Philippines is deepening its adoption of blockchain technology as a number of its internal processes are now undergoing the digital transformation.

“We believe blockchain will power the internet of finance,” UnionBank president and chief executive officer Edwin Bautista said.

Blockchain is a distributed data ledger involving a large network of entities where data is stored in “blocks” that are continuously updated and are secured using cryptography. Blockchain makes data management and data-driven processes decentralized, tamper-proof, and more transparent.

Bautista said while other banks are still on a wait-and-see mode on the use of blockchain, UnionBank is already using the technology in its internal processes.

“To us, it’s already here. We’re already using it in internal applications,” Bautista said.

He said the bank’s move to incorporate blockchain technology into its processes is in line with its push for innovation.

“If it becomes successful, then we take it to production,” Bautista said.

An example of the bank’s internal processes that is ripe for blockchain technology is the collection of its various operating manuals.

Bautista explained that almost every process involved in banking requires an operating manual.

“When the Bangko Sentral ng Pilipinas (BSP) implements a change, you need to revise the operating manuals,” he said.

He said the old approach of the bank in collating these operating manuals is to centralize them in one department – usually with one person having access to this – and would only release the papers when needed.

But with the use of blockchain technology, the operating manuals can be updated much faster and can be easier accessed by the people who need them.

Bautista said UnionBank already has an internal blockchain team, with close to 30 developers. This is programmed to grow as it continues to train more developers, in line with upgrading more of its internal applications.

“The world is moving forward and we’re already seeing solutions that make the whole ecosystem more efficient,” he said.

Apart from its move toward blockchain technology, the bank’s digital transformation also involves the renovation of its traditional branches into so-called ARK branches, which features self-service kiosks and virtual reality boxes.

UnionBank plans to open 10 more ARK and ARK Light branches in Metro Manila and Cebu within the year.

With the bank’s continued shift to the digital arena, Bautista acknowledged that the initial cost to convert branches from traditional to ARK branches would be higher at first, but it is the long-term value of these investments that needs to focused on.

BLOCKCHAIN TECHNOLOGY UNION BANK OF THE PHILIPPINES
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