UnionBank’s open finance arm eyes P1 trillion in transactions

SINGAPORE—UBX, a unit of Union Bank of the Philippines, is nearing P100 billion in gross transaction volume this year and, with artificial intelligence (AI) speeding up prospects for financial inclusion, it expects to further grow its business tenfold to P1 trillion in the next five years.

“AI is going to unlock financial inclusion for the rest of the population in this country,” UBX CEO John Januszczak said on Thursday in a press briefing on the sidelines of the Singapore Fintech Festival 2023.

Originally the financial technology venture studio and fund of UnionBank, UBX is now the Philippines’ leading open finance platform. Open finance refers to the leveraging and sharing of customer-permissioned data among banks, other financial institutions and third party providers to develop innovative financial solutions, such as those that provide real-time payments, greater financial transparency options for account holders, marketing and cross-selling opportunities.

Such framework aims to empower customers by giving them better control over their personal and financial data catalyzing the development of products and services that are responsive to their needs.

When the company started five years ago, the UBX chief recalled that less than 27 percent of the Philippine population had bank accounts.

Since then, Januszczak said UBX has helped embed banking solutions into everyday transactions, capitalizing on the high mobile phone penetration and internet usage in the country.

Apart from approaching P100 billion volume in terms of gross transaction volume, he said UBX has since then processed close to P30 billion in credit applications and transactions. He likewise noted that UBX had turned profitable in its second year of operations.

Moving forward, Januszczak said UBX was internally targeting to grow their gross transaction volume as a measure of real customer transactions by 10 times using the platform in five years.

“AI is a major enabler. It’s in information security, cybersecurity, KYC (know-your-customer) application process. It’s in understanding transactions and behavioral or transaction profiles and finally, engineering,” said Mario Domingo, UBX global chief technology officer.

UBX is targeting to have 50 percent of codes in the future being written by AI while human personnel can review and validate them, he added. To date, nearly 50 percent of UBX codes are AI-generated.

“We will increase the size of our team but we’re also leveraging AI technology to get more production out of our team,” Januszczak said, adding that AI was “unlocking productivity at a massive scale.”

Domingo added that since trust is a serious issue in the fintech world, UBX was carrying it as a badge or pride rather than a burden that UBX, being a subsidiary of a bank, is much more regulated relative to fintech peers.

Moving forward, the officials said UBX would be focused on creating and growing high-quality sustainable business.

Januszczak said they are not obsessed with reaching “unicorn” or $1-billion startup valuation for now.