The Bangko Sentral ng Pilipinas has granted Union Bank of the Philippines’ application to establish a digital bank in the country. Union Digital Bank or UnionDigital, which is a wholly owned subsidiary of UnionBank, is the fourth digital-only bank to be granted a license to operate, after Overseas Filipino (OF) Bank of Land Bank of the Philippines, Tonik Digital Bank, and UNObank.
UnionBank is also the first publicly listed Philippine bank to be granted a digital banking license by the BSP.
“The digital bank is going to be the principal vehicle for UnionBank to service and support the lower end of the market—the unbanked,” UnionBank president and CEO Edwin Bautista said during a webinar series hosted by the BSP. “This is our vehicle for inclusive prosperity.”
“The BSP has long recognized the role of digital platforms in affording greater efficiency in the delivery of financial services and products,” BSP Governor Benjamin Diokno said at the same webinar. “We also see the recent issuance of the Digital Banking Framework as an integral building block in promoting and enabling regulatory environment that fosters responsible innovation, promotes cyber resilience and contributes towards advancing the digitalization of the financial sector.”
In December 2020, the BSP issued guidelines for digital banks in the country, including requiring them to have a minimum capitalization of P1 billion.
UnionBank already has a strong digital presence and has, in fact, been named “Digital Bank of the Year” for the fourth year in a row last January by The Asset Triple A.
Other financial institutions have reportedly applied for a digital banking license, including Philippine National Bank, Voyager Innovations (Paymaya), and Rizal Commercial Banking Corp. JG Summit Holdings of the Gokongwei Group has invested in South Africa-based digital bank Tyme through its corporate venture capital unit JG Digital Equity Ventures (JGDEV).
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