Union Bank of the Philippines (UnionBank) has been garnering much praise throughout the banking industry of late, especially for its digital transformation, which began in earnest three years ago and which remains ongoing.
To discuss the progress the bank is making, I am pleased to be joined by some of the key leaders of UnionBank’s digital transformation:
- Edwin R. Bautista – President and Chief Executive Officer
- Henry R. Aguda – Senior Executive Vice President, Chief Technology and Operations Officer, and Chief Transformation Officer
- Michelle E. Rubio – Senior Vice President and Human Resources Director
- Ana A. Delgado – Chief CustomerExperience Officer
A warm welcome to all….
I’d like to begin by clarifying some of your roles and responsibilities, particularly with regards to your involvement in the digital transformation.
Henry, what is your mandate as Chief Technology and Operations Officer and Chief Transformation Officer?
Henry: Well, my mandate is to cultivate new mindsets and create new capabilities for the bank in the hope that it gives the bank a shot at preventing extinction. Because on the state of the banking industry right now, there’s an extinction-level event where a lot of the traditional banks are faced with disruption largely from outside the industry, like the Amazon, Facebook, Google etc.
Basically, to aid our chairman, CEO and the rest of the team to ensure that we don’t go extinct. Also, part of my role as transformation head is to work closely with our HR and our people to make sure that the transformation is people-led. It’s a transformation where people are at the center.
Ana, as Chief Customer Experience Officer, what are your main responsibilities, both generally and with respect to the digital transformation?
Ana: I’m responsible for driving strategies that ultimately maximize our ability to acquire new clients and engage and retain existing ones. We changed my role from Chief User Experience Officer to Chief Customer Experience officer because when you use the term “user experience”, it’s specific to only one use case. But my role really looks after shaping the experiences across the entire end-to-end customer journey and I wanted my title and responsibilities to reflect that.
In order for me to be effective at making sure the bank is customer-centric, I need to be looking at things that build and drive a customer-centric culture across all the different units end-to-end, regardless of specific user journeys.
Relative to the digital transformation, I lead a team of customer experience officers who are looking at radically changing the customer experience across three pillars. The branch experience. The mobile and digital experiences. And the customer’s interaction with our relationship managers.
And how much of your time is spent educating customers about UnionBank’s new user innovations?
Ana: We are educating our customers all the time. When we design our experiences we hold it as a principle that it should always be on a teaching mode. This means that every experience has to be intuitive and every moment designed with intent. It’s core to everything that we do, that we’re making sure that the experiences are effortless and self-service.
This also applies to errors they may encounter. For example, in the app, we hold it as a principle that an error message should always lead them to the solution and not just tell them that they’ve encountered an error. So, we are constantly investing in teaching our customers especially on how to get them onto digital channels.
Edwin, you have been President and CEO since the beginning of 2018. What has been the most challenging aspect of your role during this time?
Edwin: One of the most challenging aspects was leading the transformation of our people and culture. We were the first to initiate digital transformation, when most banks today are still stuck with the traditional mindset. It was not easy to rally the troops, set up different levels of organization and new ways of working or becoming agile at scale, especially so with our promise to complete our digital-transformation journey without leaving anyone behind.
And what has been your most satisfying accomplishment?
Edwin: The most satisfying accomplishment would be the alignment of our strategy with our employees—the UnionBankers. Now more than ever, the entire bank is committed to our transformation journey. We are aligned towards one objective and towards our moonshot aspirations. I thank the group heads for successfully cascading this to their teams.
It is particularly gratifying that we have received numerous and varied commendations from prestigious international-awards bodies, which validate the soundness of our strategy and inspire us to steadfastly proceed.
Michelle, given that HR is a critical enabler and co-author of the bank’s digital transformation, what extra responsibility has been placed on your shoulders to ensure its success? And have you been required to learn more about the various aspects of digital banking, and if so, what specifically?
Michelle: I am heavily involved in the people side of transformation. I consider myself and the HR team, which I lead in UnionBank as a strategic business partner and change agent to enable the organization to be agile at scale and digital at the core. Our goal is to create a culture of engaged UnionBankers who are open to change, open to become lifelong learners, open to unlearn and relearn the new ways of working as well as acquire digital knowledge and skills so that UnionBankers can produce customer centered innovations across the organization. I had to learn what digital banking is about to support the organization like new technology that can change or disrupt financial services, new regulations, new knowledge and skills specifically on human centered design, use of data, among other things. By understanding digital banking, I can align our people strategy to support it.
Because of these initiatives, we have designed an agile operating organizational model that develops entrepreneurial connected leaders. We have squads and teams that develop products and solutions iteratively and produce improvements every 2 – 4 weeks. Our self-driven capability building programs promote “working by learning and learning by working.”
Henry, one of the bank’s key innovations in the digital transformation is the open API platform. In your view, what has been the most satisfying aspect of implementing the platform?
Henry: The most satisfying story that I’ve heard that was related to the API platform is when our CEO told the story about the fintech who approached him and asked him, “When can we launch into production?” And he noticed that the fintech was already playing with our APIs, was ready to launch with a payroll platform, and all he needed to do was to promote it to production.
Before that, you’d hear horror stories about companies trying to connect to banks, and it would take them six months to a year, if they were lucky, to be able to connect to their system. And I think it was also our CEO who said some banks are still on host-to-host connections. Some banks are still on old architecture. When you hear stories like that, it validates the strategy that we’ve selected.
And one of the very first projects, and I remember this clearly, I think it was my first month in the bank: The API platform was implemented through a handshake with our CEO and the head of the vendor that provided the platform. It was with a handshake. And the provider there was amazed as well. “Wow, this bank decides very fast.” And without technical difficulties. After connecting to the API platform, everything became easy in terms of connecting systems. I hear stories where previously we only had two or three systems per year that we could integrate.
If I’m not mistaken, UnionBank has also piloted robotic process automation in some of its internal processes. Which processes in particular, and what do you hope to achieve from this initiative?
Henry: We’re using it for loan processing. It’s spread across the middle office and the back office right now. And we’re trying to scale it up. Now what we’re trying to do with it is the classic case of man versus machine, or man versus automation. In UnionBank, the people who are actually designing the robotic process are our guys from operations.
So, it’s automation with human collaboration. That’s what we want to highlight. That’s why we give our robots names. And we try to make it, ideally, as part of the workforce. So, if we can name them, we can get to know them, get used to them.
So, that’s what we want to achieve, to tell people they shouldn’t be afraid of automation. Automation is there to complement your work and add value to your work. I think we’re achieving that. Our people in operations themselves are learning the tools. This is the third year of our transformation, and more and more of my job is about ensuring benefits are realized. And I think that robotics will have better scale in terms of the benefits that we will realize from the transformation.
Michelle, what do you think makes UnionBank such a great place to work?
Michelle: Because you are allowed to showcase your talents and be the best version of yourself. I think we have a good thing going here in terms of having a very open culture and a passion for innovation. Here, it’s about ideas. And you’re respected for that. So, it’s not about age. It’s not about tenure. It’s the idea that you bring in and the expertise that you bring in. We really value our talents and the contributions that they make. The feeling that you are able to contribute and make a difference for the organization. I guess, it’s part of the culture that keeps people going. It keeps people aspiring for more. Which is just what we want in this kind of organization. I also think that UnionBankers believe in a higher purpose which is driven by the values of Magis, doing more, better, greater and Ubuntu, doing things with the spirit of belonging, teamwork and community.
Ana, by the time the digital transformation is finally completed, which single goal do you most hope will have been accomplished?
Ana: So, I have two parts to my answers to this. First, that I don’t view the transformation as an event that has an end. For anyone who thinks it will end, I think they are in for a surprise. So, for me, the ultimate success criteria of the transformation is going to be our ability to consistently adjust our strategies in response to changing market conditions and technological advances. And I think that the maturing of our agile workforce and ways of working are going to be essential to delivering this. So, a lot of what Michelle and her team are leading is super important.
But the second answer is that as the Chief Customer Experience Officer, I hope that customers will look at UnionBank as a company that delivers so much value in their lives that they can’t live without us. And for employees, that they’re proud to be a UnionBanker and firmly believe that they’re pioneering the future of banking.
Edwin, as a result of the digital transformation, do you expect that UnionBank will be an entirely different organization from the one that existed beforehand? Will any commonalities exist in terms of corporate philosophy, approach to customer service, internal banking culture, etc.?
Edwin: If you think about it, our approach remains the same. Our cash-management strategy started this way. We provided solutions to corporations in order to extend financial services to SMEs and consumers. We are just taking it to the next level in order to scale up.
Our aim now is to provide virtual platforms for various ecosystems in order to extend financial services to a larger SME/MSME and consumer base. Innovation and people remain at the core of our strategy. And our purpose, vision and objectives remain the same. It is just that the approach has been expanded, given the changes in consumer behavior arising from the emergence of new technologies, including social media, financial technology and the like.
Thank you, all, for your time today. And all the best for the next phase of the transformation.