Companies today face immense pressure to evolve and adapt to the digital age — it's either you transform or be left behind. UnionBank of the Philippines was in this very position back in 2016 amid rising fintech competition.
At SaaScon PH '24, Ana Aboitiz Delgado, UnionBank's Chief Digital Channels Officer, shared their transformative journey.
Ana kicked off by stressing the crucial mindset needed, "A company needs to have either a burning platform or a wildly compelling vision to drive it." For UnionBank in 2016, it was a “burning platform” that propelled change. As Ana explained, if they did nothing, their franchise would shrink and they believed they had nothing to lose by trying to play in the new "game" of the digital era.
With this challenge-driven mindset, UnionBank launched Plan A and its digital transformation objective: To be the best digitally transformed bank in the Philippines.
UB Plan A: Becoming the Best Digitally Transformed Bank
Ana emphasized the need for a complete transformation strategy, stating that "the transformation needed to be holistic for it to be successful." To achieve this, UnionBank implemented two key plans:
- Enterprise Architecture Plan: This plan started with defining business goals and identifying the technologies needed to reach them.
- People Transformation Plan: This plan assessed the current skills and knowledge of UnionBank's employees. The bank then either hired new talent with the required skills or developed training programs to upskill existing staff.
With these plans in action, UnionBank mapped its new capabilities to different customer touchpoints, including branches, mobile apps, customer service, etc.
UB Plan B: Embedding Banking into Platforms
After four years of transformation, UnionBank realized that business results were not meeting their expectations. It was then that they needed to take on a digital proposition. This revelation led to the launch of Plan B: an initiative to embed banking into platforms, giving birth to UBX (the Philippines' leading Open Finance Platform that allows businesses and financial institutions to connect and access various financial services.).
The COVID-19 pandemic also proved to be a pivotal moment for UnionBank. Working in an agile methodology, they swiftly launched an app feature on April 15, 2020, enabling customers to remit funds to different provinces in the Philippines. This digital transformation prepared the company for several significant milestones:
- Thriving during the pandemic and acquiring a customer base by enabling Filipinos to bank digitally
- Purchasing City Bank in the Philippines
- Launching a purely digital bank
Becoming a Great Retail Bank
With the success of their digital initiatives, Ana said that UnionBank revamped their digital transformation objective: "To become a great retail bank." To track their progress towards this aspiration, they embarked on the following milestones:
- Holding the second-largest retail customer base in the country
- Having the largest BancNet depositor base
- Being the second largest in terms of digital transactions (Number one bank, second to GCash)
- Having the most highly rated and downloaded banking app in the country
- Holding the highest baking Net Promoter Score (NPS)
As Ana concluded her talk, she stressed the importance of agility, continuous improvement, and customer-centricity. She highlighted the significance of adapting to customer feedback, emphasizing the need to move in the direction desired by customers.
Transforming a Traditional Bank into a Digital Powerhouse: Ana's Journey at UnionBank
After Ana’s insightful presentation on UnionBank's digital journey, the event transitioned into a lively Q&A session, moderated by Paul Santos, Managing Partner of Wakemaker Partners.
Ana's Career Path and Introduction to Banking
Ana's journey began with a Fine Arts degree from a college in the US. After graduating, she moved to the Philippines in 2004.
With the art scene being underdeveloped at the time, she explored alternative paths, interning at Peninsula Hotel and McCann Erickson. It was Edwin Bautista, the current UnionBank CEO, who convinced her to try out product management.
In 2005, despite having no prior knowledge of banking, she was sent to India for a core banking replacement project. This experience sparked her interest in the intersection between banking and technology, and kick started her career in banking.
The Decision for Digital Transformation
According to Ana, the decision took about three to six months. UnionBank brought in speakers to educate them on the digital world and challenge them to face reality.
Even in the early 2000s, the bank was already trying to build innovation as its competitive advantage, launching the first debit card in the country and enabling online tax payments for corporations. Upon recognizing their innovative DNA, they decided to build upon it.
Cultural Changes for Digital Transformation
The first change was a mindset shift. UnionBank believed in bringing everyone along on the digital transformation journey. They set up centers of excellence to help employees understand new technologies and upskill branch managers in coding.
Addressing potential resistance from employees due to fear of job loss, lack of knowledge, or becoming irrelevant was crucial. The bank emphasized that no one would be let go if their job became redundant due to technology and provided necessary training courses.
Ana stated, “It started out as 'no one gets left behind.' Maybe six to eight months later, it became 'no one gets left behind, but you've got to step onto the train.'"
The second change involved becoming an agile organization. Work practices, product development, and delivery had to transform. Ana explained:
Decision-Making Framework
UnionBank's decision-making framework was centered on putting business first. The Enterprise Architecture Plan, developed through conversations with business and sales teams, identified the necessary technology pieces based on what they wanted to deliver, which was anchored on business or customer needs.
The process involved evaluating whether to build, buy, or borrow software, hardware, or other requirements. While prioritizing customer experience, the bank collaborated with local companies for product development.
Collaborating with Startups and Fintechs
Instead of viewing fintechs and startups as competitors, UnionBank held the mindset that they had much to learn from these focused companies. Ana acknowledged that startups and fintechs would be better than the bank at their specific line of work, making it essential to be open to working with them.
Priority Areas for Partnerships
According to Ana, AI is a strategic theme they are just beginning to develop a roadmap around. The bank is also actively seeking partners in the payment space, enabling clients with front-end websites to acquire capabilities for seamless payments.
Lessons from the Digital Transformation Journey
Ana shared that they didn't realize the extent of people transformation necessary for the digital shift. She emphasized that nothing would work if they couldn't get people involved in the desired change.
UnionBank's Compelling Vision
Ana expressed the belief that UnionBank can become the great retail bank they aspire to be. However, after significant growth in recent years, she stressed the importance of maintaining the mindset they had in 2016 when they started the transformation. Constantly evolving, reassessing their position, and ensuring they deliver on their promises are crucial.
Ana's closing words encapsulated this sentiment: “[Be able] to reassess where you are and make sure that you're right sizing (adjusting the size of your team or operations to align with current needs and future growth objectives) to be able to handle what you have today and where you want to go tomorrow.”
Unleash Growth through Digital Transformation with Sprout
UnionBank's remarkable digital transformation journey showcases the power of embracing change and adapting to the evolving landscape. From a "burning platform" in 2016 to becoming a leading digital bank, their story serves as an inspiration for companies across industries.
Digital transformation is no longer an option but a necessity to thrive in today’s business landscape.
At Sprout, we understand the challenges and opportunities that come with this transition. Our Sprout Ecosystem will empower your organization to stay ahead of the curve and capitalize on the boundless potential of the digital age.
Contact us today to schedule a consultation and take the first step towards a future-proof, digitally-driven enterprise.
For more information on upcoming Sprout events focused on digital transformation, please visit our events page.
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