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In digital arms race, UBP wins

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Digital innovation is disrupting the banking industry, with technology playing an important role in optimizing consumer experience. In the digital arms race in the domestic banking sector, one company is staying ahead of the game by anticipating what’s next and taking bold steps to embrace what the future holds.

We may not be the biggest bank now in terms of assets or number of branches, but with technology, we could be number one

“We want it to happen,” UnionBank of the Philippines (UBP) CEO and president Edwin Bautista told the Daily Tribune when asked to comment on studies showing all financial transactions in the Philippines will shift to digital by 2025.

“We have prepared for it through careful planning and aggressively pursuing technological and digitalization programs in all our systems,” he added.

And true enough, while almost all banks have focused their digitization by providing mobile functionality and online transactions, UBP anchored its digital transformation in establishing a robust architecture and infrastructure. The result is a complete digital organization that combines speed and convenience with human interactions and a unique business model that is changing the fundamentals of traditional banking.

UBP’s digital strategy is pillared on these four principles: Reinventing customer experience, leveraging the advantage of big data (artificial intelligence), creating a new business model and establishing a digitally-driven organization.

Indeed, UBP is pioneering several initiatives that many of its much larger competitors are only starting to think of. The Aboitiz-led lender is the first to introduce a face recognition technology platform that eliminates traditional passwords through its “Selfie Banking,” funded fintech (financial technology) sector, collaborated with rural banks with their i2i Project to enable connectivity and better financial services, used blockchain in its internal communications and even introduced the world’s first cryptocurrency ATM backed by a bank.

“We may not be the biggest bank now in terms of assets or number of branches, but with technology, we could be number one. And even if full digitization of financial transactions does not happen, we can continue traditionally doing our business and still maintain UBP’s competitiveness,” Bautista described how the bank is positioning itself even with the uncertainties in the digital future.

Customer experience
According to Bautista, the customers are at the center of all the innovations UBP does. And this is evident on how the lender has reimagined and redefined its customer experiences with their digital initiatives.

Bautista

From manually mapping customer transactions, needs, purchases, advice and sales and administration, UBP is using big data or artificial intelligence to create a profile of each consumer’s journeys.

Digitizing the customer journey not only saves money and free some bank for more critical functions like relationship building and cross-selling, streamlining the process makes their customers more satisfied because their needs are served from start to finish.

Big data
Using the big data or artificial intelligence, UBP has the advantage to identify business opportunities, better understand their consumers while reducing operational costs. Data mining allows the bank to better prospect and target clients.

“In the old days, we analyze volumes of papers to understand the individual needs of our customers. But with data analytics, we now have a complete profile of our clients so we understand their requirement and we can provide them better services,” Bautista added.

Data analytics allow UBP’s relationship managers to choose which customer suits their expertise based on the client’s demand and offer a tailored solution instead of suggesting a product that might not match.

This means a relationship manager who is an expert in forex trading is partnered with a client who trades currencies or a commodities expert to a commodity trader and so forth.

Artificial intelligence allows the bank to see granular cluster analysis to match an individual consumer product offering to the average for that consumer segment and use that data to cross-sell and strengthen relationships.

The Ark experience
Although digitization lessens the need for consumers to visit their branches, clients still prefer to be served the best of both worlds by interacting with an actual person for financial advice, while enjoying the speed and convenience of a digital experience.

It is, for this reason, UnionBank launched The Ark, envisioned to be what bank branches will look in the future. The ARK hopes to win over a select clientele that is very comfortable with digital technology but still prefers the warmth of face-to-face transactions.

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