UNION BANK of the Philippines, Inc. has adopted blockchain in more internal processes to cut operational costs and further learn the technology.
UnionBank President and Chief Executive Officer Edwin R. Bautista said last week that the Aboitiz-led lender has launched “several” internal blockchain applications.
“In operations, we already launched several internal blockchain applications. The goal is to put blockchain as much as we can in the internal process,” Mr. Bautista told reporters during the Philippine Investment Forum in Taguig City on Wednesday.
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, tamper-proof and more transparent.
Mr. Bautista added the bank intends to “blockchainize” more internal processes to reduce operational costs.
“We want to reduce our costs. At the same time, it also helps us learn the technology that we can now apply for customers,” UnionBank’s chief executive noted.
In a previous press briefing, Mr. Bautista said “many” of its more than 700 internal processes are right for conversion into blockchain such as check clearing, account opening and funds transfer, among others.
UnionBank started to adopt the technology in its internal processes by putting its general circulars and operating manuals into the blockchain, enabling the more efficient distribution of the materials to bank employees.
Aside from this, the bank launched last quarter a clearing system that connects rural banks through blockchain technology. Dubbed as Project i2i, the clearing system streamlines bank processes like inter-bank funds transfer, financial and accounting reports, remittance, know-your-customer process and branch locating.
UnionBank booked a net income of P1.78 billion in the second quarter, down 17.2% year-on-year, on the back of lower miscellaneous income.
The bank is set to offer up to 200 million common shares via a stock rights offering in September to support expansion.
Shares in UnionBank closed at P83.90 each on Friday, down 10 centavos or 0.12%. — K.A.N. Vidal