Aboitiz-led Union Bank has partnered with five smaller banks, among them rural banks, in pilot-testing its blockchain platform as part of the financial inclusion initiatives.
With the blockchain platform, Dr. Justo Ortiz, chair of Union Bank and the Blockchain Association of the Philippines, said yesterday in a press conference at Park Inn Hotel that it can help “crack the hole of financial inclusivity.”
“This can now become hole-breaker to attain inclusive prosperity. It will infuse a lot of hope as there are still 35 million Filipinos without bank accounts especially those in rural areas,” Ortiz said.
The blockchain platform, where Union Bank will serve as a middle entity, would be pilot-tested in rural banks such as Cantilan Bank, PR Savings Bank, City Savings, Fairbank and Progressive Bank.
Under the platform, servicing between banks and between branches will be offered seamlessly at P1 per transaction no matter its value.
Union Bank is targeting to fully launch and swing the program to commercial operations by the first quarter next year. The pilot-test of the platform in five rural banks, which would be implemented in three months, was approved by Bangko Sentral ng Pilipinas.
The platform would run through the Kaleido blockchain platform of Canada-based firm Consensys.
In a separate press conference at Mesa in SM Lanang Premier, Josefa Isabel Garcia, country director of Consensys Philippines, said they designed the solution with the hope to serve especially the rural areas.
“We also hope to firm up strategic partnerships with other sectors,” Garcia said.
Tanya P. Hotchkiss, executive vice president of Cantilan Bank, said they saw the potential of the blockchain platform, where clients can send money to other rural banks even at a lower cost. “The transaction fee for now is P1,” she said.
The platform, she said, is aligned with their goal of improving their system by tapping digital technology.
“We are also keen on achieving the goal to be a full-service community bank,” Hotchkiss said. At present, Cantilan Bank has 43 branches in Caraga Region, Misamis Oriental, Compostela Valley, Davao del Norte, Davao del Sur, Davao Oriental, Leyte, Southern Leyte and Bukidnon.