Union Bank of the Philippines prepares to launch its digital bank by the second quarter of 2022, a top executive said Wednesday.
UnionBank executive vice president and financial inclusion executive Manuel Santiago Jr. said in an online economic forum organized by Economic Journalists Association of the Philippines that there is a heightened awareness on the part of the population in terms of digitalization especially during the current pandemic.
"We are currently organizing the UnionDigital… We will launch it by the second quarter of next year," Santiago said.
Santiago said he was expecting good competition as the trend now is to go digital and in line with Bangko Sentral ng Pilipinas' strong push for digitalization even before the pandemic struck.
"The market is new, and therefore we think there is going to be a good competition, but there is a huge unbanked population and we can extend our reach to the market that is not reached today," Santiago said.
Santiago said competition from foreign banks could also be expected.
"We expect to grow our share and hope to contribute to the BSP's goal of having 70 percent of adult Filipinos to have bank accounts… We see ourselves as a major participant to the goal of the BSP [of financial inclusion]," Santiago said.
The BSP approved the application of UnionBank in July for authority to establish a digital bank. UnionBank said the digital bank would be incorporated as Union Digital Bank (UnionDigital), a wholly-owned subsidiary.
The announcement made UnionBank the first publicly-listed Philippine bank to be granted a digital banking license by the BSP.
UnionBank president and chief executive Edwin Bautista said the digital bank would be the principal vehicle for UnionBank "to service and support the lower end of the market—the unbanked. This is our vehicle for inclusive prosperity.”
Bautista said that the digital bank approach allows UnionBank to create a digital bank from scratch, providing an environment where new technologies can be developed using the best technology available out there.
BSP Governor Benjamin Diokno earlier cited the importance of the BSP’s Digital Banking Framework to bring the Philippines a step closer to reaching its strategic objective.
UnionBank was named “Digital Bank of the Year” in January this year by The Asset Triple A, holding the distinction of being the first and only Philippine bank to receive the award four years in a row.
UnionBank's net income climbed 94 percent in the first half to P8.3 billion from a year ago, on the back of sustained strength in core businesses.