The Market Monitor Minding the Nation's Business
Union Bank of the Philippines (UnionBank) has earmarked P3 billion for capital expenditure (capex) to complete its digital transformation strategy, UnionBank President and Chief Operating Officer Erwin R. Bautista said.
Bautista said the project is targeted for the bank to maintain its position as having the best in retail banking innovation.
UnionBank was also recently assigned the highest corporate credit rating of PRS Aaa by Philippine Rating Services Corporation (PhilRatings) symbolizing that the bank has a very strong capacity to meet its financial commitments.
The key rating factors cited UnionBank’s aggressive use of technology as well as the bank’s FOCUS 2020 embarking on what UnionBank referred to as a “digital transformation strategy.”
The P3 billion expenditure will be in line with the bank’s strategy to complete its digital transformation and will involve the use of new hardware, software and the recruitment and training of people, Genaro V. Lapez, UnionBank Executive Vice President said.
Lapez told The Market Monitor that the bank’s capex this year is higher compared to the last four years which averaged close to P1 billion a year.
“With the digital transformation, we are not only upgrading but improving service to our customers,” he said.
Lapez said that the implementation of digital transformation, given the time needed for software development, will entail phases that will be completed in 18 to 24 months.
“We will have to make capital commitments already,
because our partner-service providers will begin to develop customized hardware, software and platforms….” he said.
“UnionBank’s digital transformation will be the best way to respond to changing landscape in the Philippines because of the millennial population, which according to the NSO (National Statistics Office) were a minority (in population) five years ago but in the next 3 to 5 years will become mainstream,” Lapez said.
With the changing consumer behavior with different expectations, the bank is preparing for the future, maintaining branch banking with presently over 200 branches, and expanding on digital space, Lapez said.
The transformation will entail the bank being ready on a 24/7 basis with state-of-the art speed through processing, and enhancing cyber security, he said.
UnionBank currently maintains “the vast majority of new payroll accounts” belonging to the millennial segment of the market who are engaged in the business process outsourcing (BPO), Lapez said.
He added that this account represents the bank’s latest acquisition in the payroll account. RIZA LOZADA