The adoption of blockchain and open finance technologies will see one Philippines bank triple its business this year.
The Union Bank of the Philippines’ (UBP) fintech unit UBX grew 44 times last year in a sign of increasing acceptance of new technologies in banking.
UBX launched i2i as a banking-as-a-service platform in 2019 to serve rural communities.
The Philippines is a rapidly-developing economy of over 100 million. However, 70% of citizens have limited access to banking services. One-third of the population lives on less than $2 per day.
“2021 was a year of immense growth for i2i with the growing demand for financial services in the country. Our goal is to grow by 300% this year,” said Anne Yosuico, UBX Managing Director for Banking Services.
The i2i platform was launched in partnership with 130 rural banks, with the support of the country’s central bank.
The platform enables ordinary merchants, such as small store owners, general merchandise stores, or any registered business, to offer financial services like ATM withdrawals, funds transfers, collections, and deposits.
According to Yosuico, demand for mobile ATM services is behind the increase in growth.
Blockchain to drive SME growth in Philippines
In Jan, the World Economic Forum (WEF) said blockchain would propel the growth of small and medium enterprises (SMEs). SMEs account for nearly 90% of all businesses, employing 50% of the workforce, and contribute about 40% of the GDP (gross domestic product) in emerging economies.
The World Bank’s Enterprise Survey showed that SMEs are hindered by the lack of access to financial services, impacting their operations. Blockchain could bridge the financial gaps and allow small businesses to build and grow by adopting and embracing the technology.
Blockchain empowers small businesses
Blockchains can connect small businesses to global markets, saving them costs and simplifying payments.
With a digital wallet, a small business can also accept cryptocurrency as a method of payment from customers.
More importantly, small business owners can use blockchains to raise funds through Initial Token Offerings (ITOs), which are equivalent to equity in traditional companies and can be exchanged or traded.
Yosuico explained that using blockchain and open finance technologies could open a new world of opportunity for merchants, from processing loan applications digitally, to selling insurance and performing know-your-customer (KYC) checks.
“As a strong ally of the government and the industry, we are committed to building and developing more financial solutions to bring banking services closer to Filipinos,” Yosuico said.
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