Digitizing Financial Services in PH with Blockchain
UnionBank partners with Microsoft to pursue blockchain technology in PH
Today, digital technology is pushing people, businesses, and governments
to rethink the way they work and operate. In the banking and financial
industry, fintech companies are disrupting conventional methodologies and
introducing innovative products to cater to mobile and connected customers that
demand state-of-the-art digital services.
Union Bank of the Philippines (UnionBank) is in the midst of a digital
shift as it pursues a three-point plan. This aims to transform its operations with
digital technology, put up a digital bank, and engage fintechs in catering to
the local market.[1]
As part of its endeavours, UnionBank has partnered with Microsoft to
conduct blockchain trials on Azure.
“Similar to our mission to empower every person and organization to
achieve more, UnionBank is committed to making lives better and enriching the
lives of Filipinos through greater financial inclusion. We stand together in
the belief that financial service institutions need to ramp up digital
transformation efforts to engage users and transform products,” said Hans
Bayaborda, Managing Director and Country General Manager of Microsoft Philippines.
Blockchain for greater financial inclusion
A recent BSP survey found that 86 percent of Filipino households remain
unbanked.[2]
Blockchain can push for greater financial inclusion by allowing financial
institutions to provide accessible, useful, and affordable products and
services that meet client needs. Whether it’s transactions, payments, savings,
credit, or insurance, these can be delivered in a responsible and sustainable
way via blockchain.
Arvie de Vera, Head of Fintech at UnionBank, said: “Blockchain
technology will revolutionize financial services, and more so in a context like
the Philippines where financial inclusion is such a challenge.”
Blockchain is transformational technology that brings down the cost to
serve the mass market. At its core, it is a form of data structure used to
create a digital transaction ledger that, instead of resting with a single
provider, is shared among a distributed network of computers.[3]
This promotes financial inclusion by:
Modernizing legacy banking infrastructures. With blockchain technologies, banks can increase efficiencies by
addressing the settlement process across the board. Speeding payments, trading
of all financial instruments, and automatically outputting regulatory
information will massively disrupt the industry and shift labor into better
customer service.
Securing transactions. Blockchain technology offers secure transactions through
an encrypted ledger. This addresses cyber threats by establishing authenticity
and tamper-proof record systems. The decentralization of the command systems in
blockchains is critical to safeguarding cyber security.[4]
Azure – a secure blockchain platform
UnionBank is currently conducting and has had successful blockchain
trials on Azure.
As an open, flexible, and scalable platform, Azure supports a rapidly
growing number of distributed ledger technologies that address specific
business and technical requirements for security, performance, and operational
processes. Microsoft’s data and AI solution provides unique off-chain data-management
and analysis capabilities not offered by others. The vast Microsoft partner
ecosystem extends the capabilities of UnionBank’s platforms and services in
unique ways that fit specific workload and industry needs.
Azure is secure and provides a rapid, low-cost, low-risk, and fail-fast system
for organizations to collaborate on by enabling them to experiment with new
business processes—all backed by a cloud platform with the largest compliance
portfolio in the industry.[5]
“The Microsoft partnership has also been about sharing best practices
and experiences. UnionBank is grateful to have the guidance of such a
technology leader—one who has also undergone its own transformation,” de Vera
said.
Revolutionizing PH banking
As a tech-savvy organization, UnionBank is embracing digital
transformation through its strong culture of innovation and leadership. It is
the first bank in the Philippines to pursue blockchain trials.
“It’s an exciting time. The arrival of blockchain in the Philippines is
groundbreaking and can revolutionize the financial services industry and lead
to greater financial inclusion in the country. As the first bank to pursue
blockchain, UnionBank is making big strides in its digital transformation, and
Microsoft is committed to helping them make Filipino lives better,” said
Bayaborda.
[1]http://www.manilatimes.net/unionbank-gears-digitization-take-fintechs/330191/
[2]https://business.mb.com.ph/2017/01/14/86-of-filipino-households-dont-have-bank-accounts-bsp-survey/
[3]https://azure.microsoft.com/en-us/solutions/blockchain/
[4]https://news.microsoft.com/apac/2016/11/29/transforming-the-banking-and-financial-services-model-in-asia-with-blockchain/
[5]https://azure.microsoft.com/en-us/solutions/blockchain/
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