BANK OF THE Philippine Islands (BPI) is not yet keen on using blockchain technology as the lender is still studying the applicability to banking processes.
Cezar P. Consing, BPI president and chief executive officer, said the concept of a distributed ledger “is quite interesting.”
“Blockchain is a distributed ledger, so that by itself is quite interesting. That, we continue to study. But something we would use right now? No, not yet,” he said following the listing of its new common shares early this month.
“Is it applicable to a bank like us right now? Maybe not yet but we continue to study it very closely,” he said. “We’d like to see how this thing develops.”
Blockchain is a distributed data ledger which involves a large network of entities where data is stored in “blocks.”
The storage units are continuously updated and being secured using cryptography, making data management and data-driven processes decentralized.
Mr. Consing noted the Ayala-led lender is looking at the ubiquity, security as well as the energy requirement needed to run a blockchain.
“We just don’t know enough about it yet. Remember, blockchain technology uses a lot of energy. It can be expensive in a country where energy is valuable,” he said.
“Think of where we are as a country and where we want to devote our energy resource… We should probably [look at it] before dabbling into blockchain technology.”
Last month, UnionBank of the Philippines said it is embracing blockchain to connect rural banks and increase the efficiency of its internal processes.
UnionBank President and CEO Edwin R. Bautista said many of its banking processes are “right for conversion into the blockchain technology.”
He added that it will first adopt the “disruptive” technology by putting general circulars and operating manuals into the blockchain, enabling a more efficient distribution of the materials to its employees.
Meanwhile, Mr. Consing said BPI views itself as a consumer of financial technology (fintech) rather than an innovator.
“Our philosophy towards fintech is we want to be able to use what’s available and equitable for us. We’re looking at applications that makes sense and we could use,” he said, adding that it might take too long if the bank tries to develop the technology by itself.
“I don’t think you could expect us to be a big technology innovator. That’s not us. You can expect us to be able to use innovative technology in a way that helps. And to use it quickly if it’s available,” Mr. Consing added.
BPI, the third-largest bank in the country in asset terms, booked a net income of P6.25 billion last quarter, flat from the profit posted in the same period last year, on the back of lower trading gains.
Shares in BPI ended at P98 each on Friday, up P2.20 or 2.3% from its previous close. — Karl Angelo N. Vidal