We Are UnionDigital Bank & This Is Our Story

In July 2021, Union Bank of the Philippines (UnionBank) was the only publicly listed universal bank granted a digital bank license by the Bangko Sentral ng Pilipinas (BSP) to establish UnionDigital Bank. 

While the COVID-19 pandemic was the impetus for other banks to become digital and for digital banks to be set up, UnionDigital Bank’s genesis goes well beyond this. 

Our story is rooted in UnionBank’s digital transformation journey, which began in 2015 under the leadership of Dr. Justo “Tito” A. Ortiz, former Chairman and current Vice Chairman of UnionBank, Edwin Bautista, President and CEO of UnionBank, and Arvie de Vera, Co-founder and CEO of UnionDigital Bank, who was then the Head of UnionBank’s Fintech Business Group. 

The work of these three visionaries led UnionBank’s digital transformation journey to success and soon enough, the progression to create UnionDigital Bank.   

To Digitize or Die

Seven years ago, few businesses in the Philippines were undertaking their own digital transformation journey. UnionBank was one of the first companies to do this, realizing that the future will be digital and it had to essentially digitize or die. We observed that financial technology (fintech), blockchain, and open finance, though relatively nascent at the time, were beginning to change how financial services were experienced. We envisioned the future in this context and realized we need to prepare ourselves for more disruptions. 

This realization kick-started our transformation journey. Thus, we set off to transform our business in order to stay relevant for our customers today and customers of tomorrow. We were set on not only disrupting our industry, but our own organization as well. 

Navigating Uncharted Territories

One would agree that it takes a visionary to navigate across raging seas and oceans. At UnionBank, this was Tito Ortiz who believed that “the future does not come from the present, rather the present comes from the future.” 

He instilled in us the belief that we cannot get to the future by following the conventional — we needed to reimagine what the future would look like and build new vehicles to get there. 

As a true evangelist of innovation and digitization, Tito acted as our guide in visualizing this future, meanwhile Edwin, a visionary in his own right, saw this and commanded the ship that would carry the bank across raging seas and oceans. 

UnionBank was the pioneer in banking innovations. There were no footsteps to follow, no manuals on how to transform. But that vision of Tito and Edwin, as well as the higher purpose of the transformation, Tech Up Pilipinas, were UnionBank’s anchors in bravely venturing forth into uncharted territories. 

Tech Up Pilipinas 

UnionBank’s transformation initiatives were anchored on a higher purpose—Tech Up Pilipinas. 

By enabling customers, communities, and our ecosystems through innovative technology we can create a more inclusive Philippines. This aligns with the BSP’s objectives of improving inclusive prosperity and increasing the share of digital transactions in the Philippines. 

We cannot Tech Up the Philippines alone. To do this, we must collaborate with a variety of stakeholders. This includes closely working with regulators, digitizing corporations and their value chains, co-creating products and services with fintechs, and enabling communities among others. 

As such, UnionBank took an open and collaborative approach to innovation as opposed to trying to do everything by itself. 

Collaboration with Fintechs

In 2016, a time when bank and fintech collaboration was still uncommon if not rare, UnionBank’s Fintech Group was established to bank and enable fintechs, as well as experiment and co-create solutions with them. UnionBank has since become the fintech bank of choice because of this. 

This bank-fintech collaboration is also embodied in the API developer portal, the first open finance use case of the bank, which now houses more than a thousand end points comprising both the bank’s and fintechs’ APIs.  

The Fintech Group also led the bank’s forays into the emerging world of blockchain. It launched industry firsts such as nationwide blockchain network i2i which connects rural banks to one another and to the Philippines’ main financial network. I2i enables payments and remittances, real-time funds transfers, and bill payments for rural bank customers.

The Fintech Group also unveiled the first BSP approved Virtual Currency ATM in the Philippines in 2019 that allows customers to convert cryptocurrency to cash and vice versa. Within the same year, the group launched PHX, the first commercial bank backed Philippine stablecoin pegged 1:1 to the peso. In 2020, UnionBank partnered with the Bureau of the Treasury to introduce Bonds.Ph, an app that allows investors to buy retail treasury bonds digitally, with record-keeping done using a blockchain-based ledger. 

Eventually, the bank sought to deepen its relationships with Fintechs and extend this to investing in and creating them. As such, the Fintech Group led the initiative that would create the bank’s fintech, UBX, which builds, invests and participates in fintech. 

Birth of UnionDigital Bank

When the BSP released its digital bank license regulations in 2020, this paved the way for the creation of UnionDigital Bank, a new vehicle which would take the main bank’s transformation journey further and catapult this to an exponential degree. 

It would not only be digital first, it would be digital only. Branchless, paperless and unencumbered by legacy infrastructure. This would make it more viable for us, UnionDigital Bank, to profitably tech up and service underbanked communities, and easier for the bank to build technology needed for the future shaped by three emerging trends: Fintech, Blockchain and Open Finance which gained more ground amidst rapid technology adoption driven by the pandemic.  

Arvie de Vera, who headed the Fintech Group of UnionBank and the bank’s key transformation initiatives, became our Co-Founder and CEO given his deep knowledge of these key trends. Tito came on as Chairman and Edwin as Vice-Chairman along with a Board and Board Advisors with expertise in key strategic areas for the digital bank. 

Armed with the backing of a universal bank, deep fintech experience, a passion and purpose to Tech Up the Philippines, and UnionBank’s natural ecosystems to leverage on, we are primed to lead the way into the future of finance and democratize access to best in breed technologies, bridging innovation and regulation to make digital banking and virtual assets safe and accessible to all.