Union Bank, the financial institution that embraced the blockchain in the Philippines is eyeing to connect all or at least 500 rural banks to the blockchain.
According to the bank’s chief technology and operations officer Mr. Henry Aguda, Union Bank committed $3 million to Project i2i with the aim of serving the unbanked Filipinos nationwide.
Since its launch in Davao, five banks based in Mindanao are currently piloting the project. This is also with the Bangko Sentral ng Pilipinas’ approval.
“Hopefully, we could go above 100 [rural banks] before the end of this year … It depends on how fast the rural banks will adopt,” – Mr. Henry Aguda, Chief Technology and Operations Officer, Union Bank
Union Bank’s president and CEO, Mr. Edwin Bautista said that the project will help rural banks to connect through the central system. He added that how can they help the unbanked if the rural bank itself is unbanked. He cited that rural banks are not members of key banking networks such as Bancnet and Swift, so the blockchain initiative is an alternative that is cheaper and more efficient.
“In order for you to connect to them you have to spend on data center, cyber security infrastructure, so it’s very expensive,” – Mr. Henry Aguda, Chief Technology and Operations Officer, Union Bank
Mr. Aguda stressed that rural banks don’t need to spend anything. While connected on the blockchain, the rural banks just need to load the application i2i on its computers, tablets, or smartphones and it will now let them do bank-to-bank transactions.
He, later on, added that Union Bank is looking to connect all or around 500 rural banks in the Philippines to the blockchain.