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UnionDigital, the digital banking arm of the Aboitiz-led UnionBank of the Philippines, revealed that it already has 1.73 million customers, reached $70 million in loan book size, and has collected $50 million in deposits, four months after the Bangko Sentral ng Pilipinas (BSP) gave a go signal to the digital bank to start its operations last July.
“Since our launch, UnionDigital Bank has been focusing on serving the needs of the underserved communities within UnionBank by offering digital deposit and lending products to our ecosystem, and we will continue to support the needs of these customers with additional products overtime,” said Arvie de Vera, UnionDigital Bank co-founder, President, and Chief Executive Officer (CEO).
According to de Vera, the growth in its loan book is because the digital bank is using the available data on consumer behavior within the larger Aboitiz ecosystem to create loan products, especially since it is a subsidiary of the Aboitiz-led traditional bank:
“If you’re lending within an ecosystem, you have an anchor community, and that’s a robust way to provide credit because you have more data. Rather than using payments data, which is really not a good proxy for someone’s capacity and willingness to pay. But if you have robust set of data with context on their financial behavior, then you can properly price the risk, because you have historical data on the customer, you know you can give him a customized interest rate. A one-size-fits-all pricing is an inappropriate lending business strategy and sub-optimal consumer experience.”
The UnionDigital CEO also highlighted the digital bank’s balance sheet as its “laser focus” or priority, clarifying that balance sheets generate revenue more than just having a cool app or millions of users.
“It’s about a balance sheet. It’s about growing the loan book because that’s where the revenues come from- it doesn’t come from payments; it doesn’t come from sign ups. Valuation is great, but it’s not profitability,” de Vera added.
Meanwhile, another “milestone” that UnionDigital is looking for is having local exchange giant Philippine Digital Asset Exchange (PDAX) as one of its first corporate account customers, marking the commencement of accumulating corporate account openings at UnionDigital Bank.
“The start we’ve had with PDAX joining us on our journey affirms my excitement to include more corporate partners. We look forward to collaborating with partners of the same caliber to maximize the difference we bring to the financial lives of fellow Filipinos,” de Vera concluded, elaborating that corporate partnerships are vital in reaching the communities that need financial services.
As of now, the UnionDigital Bank app is now live for a limited number of customers only and is available by invitation only. Those who do not have an invitation code cannot access the app but can join the waitlist for the next set of customers that will get access to it.
Before 2021 ended, the Securities and Exchange Commission (SEC) allowed the traditional bank Union Bank of the Philippines to set up a digital banking subsidiary in the name of Union Digital Bank Inc. (Read more: SEC Approves UnionBank Digital Arm)
UnionDigital is one of the six banks to which the BSP granted a digital banking license. As of August this year, all six digital banks are already allowed to operate. (Read: BSP: All Six Digital Banks Now Allowed to Operate)
It can also be recalled that de Vera proclaimed that the metaverse needs banking, and UnionDigital is a bank of the metaverse, explaining that the metaverse is affecting e-commerce and vice versa, as well as how that will affect metacommerce.
This statement by de Vera supports the announcement of the digital bank that it will soon launch the Philippine Peso UnionDigital (PHD) stablecoin. (Read more: UnionBank’s UnionDigital to Launch Crypto Stablecoin PHD)
This article is published on BitPinas: BSP-licensed UnionDigital Reaches 1.73 M Customers in 4 Months; Adds PDAX as First Corporate Customer
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.