Union Bank targets 14 fully digital branches by yearend

By Joann Villanueva

August 24, 2018, 2:54 pm

MANILA -- Union Bank targets to have 14 fully digital bank branches nationwide by end-2018 and around 30-40 branches by end-2019, after its initial foray into this new concept gained recognition as "Best in Asia Pacific" within a year of its launch in September 2017.

Its first fully digital branch, called the Ark, is the one located at the Insular Life Building at the corner of Ayala Avenue and Paseo de Roxas St. in Makati City.

Union Bank President and CEO Edwin Bautista told reporters on Friday that the Ark was envisioned to help their clients easily embrace digital banking, since this will be the trend from now on.

He said the 13 additional Ark branches to open this year are not new branches but old ones that will be renovated and equipped with tablets and monitors that will allow customers to experience virtual reality services for their cash deposit and withdrawal transactions, among others.

Three major Ark branches will opened in Cebu, Davao and BGC in Taguig while 10 small ones will be opened in other areas of the country, he said. He, however, declined to elaborate on the cost of the renovations.

Asked whether this type of banking experience allowed Union Bank to increase the number of its clients, Bautista declined to give out figures but said some customers “don’t even come back” not because they are unhappy but because they can now do most of their transactions online.

To date, the bank has a total of three million clients and Bautista said digital adoption rate of their clients is already 44 percent to date.

“This include the pensioners, which is a surprise to us because we used to think that they will be the last one who will adapt. It turned out they are the fast ones because they are waiting for their pensions. Now with mobile (banking) they can apply for an alert so once they get their pension credits they are alerted,” he said.

Bautista said they are optimistic of enticing more clients as they upgrade their services since this will not be beneficial only to the clients but the bank as well.

Disclosing the result of the bank’s assessment among other clients, he said those who adapted to digital banking have four times the deposit balance compared to the non-digital clients and have six times the number of transactions.

“And more importantly, we make 12 times more than the average of a non-digital customer,” he said, citing that when clients buy things and pay electronically “the bank makes one and a half percent or one percent from the transaction in virtual discounts.”

“ So, see? We make money and at the same time we don't crowd the tellers. They (clients) don't go to the branch, our cash handling goes down, (and) our cost goes down. So revenues go up, the cost goes down,” he added. (PNA)