UNION Bank of the Philippines is helping businesses, including micro, small and medium-sized enterprises (MSMEs) become “big winners” in this new era of doing business—particularly in the supply chain financing.
Mon Duarte, UnionBank executive vice president and head of Transaction Banking and Platform Development, in a virtual press conference, Wednesday, March 16, 2022, said the bank is helping businesses streamline their operations and financing while eliminating manual processes.
“Traditional and manual financing processes applied that have once been effective pre- pandemic, now pose challenges to businesses as they restart their operations in the new normal,” said Duarte. “With the right financing technology, delays and errors they previously encountered can now be overcome and overall operational efficiency can be achieved.”
Duarte noted that MSMEs is an important sector but is an underserved segment. He said helping them employ digital processes into their operations would allow them to perform better in this new business environment and so they could focus in other areas of growing their business.
First blockchain
UnionBank developed its own integrated supply chain financing platform, allowing businesses to confidently operate no matter the economic landscape.
The bank launched its blockchain-enabled supply chain financing platforms to support businesses and their supply chain ecosystems.
“Through the platform, local businesses enjoy easy cash flow management, real-time processing of payments and loans, and clear visibility of receivables and payables in real time. We’ve also made it easier for MSMEs in these ecosystems to acquire financing through our community-based approach which removes stringent documentation,” Duarte said.
The bank’s supply-chain financing solutions operate through three crucial points—community-based approach, transparent transactions and automated financing.
Prior to the pandemic, the bank has been innovating its supply chain, financing solutions for businesses and help them migrate to digital.
In February and March 2020, UnionBank piloted the dealer financing and payable discounting programs to reduce credit exposure to vulnerable industries and MSMEs.
In January 2021, the bank also started to commercialize the credit programs to help MSMEs get access to funds and capital as the economy started to pick up.
“All these enhancements have further improved the collection and disbursement flow of supply chain communities within the platform,” the bank said.
It highlighted that digital invoice presentment, payment, loan processing, collections and reporting “have now been minimized to two minutes, compared to manual processing which can take weeks.”
“On top of these, UnionBank further enhanced the digital experience of its clients through the platform with new features such as deductions processing, automated tax compliance, self- service and real-time reports,” said Duarte.
“We also improved the platform through the inclusion of custom fields, file attachments, auto-debit arrangements, credit notes and debit notes acceptance, and SMS and email notifications for ease of processing,” he added.
Currently, UnionBank has already facilitated more than P11 billion worth of invoices and provided almost P6 billion in loans for almost 19,000 invoices across almost 400 businesses in just a year of its commercialization.
“With the supply chain platform, UnionBank has introduced an effective wholesale lending strategy packaged with a retail account and online and app banking enrollment. The platform also allowed the bank to lend effectively to MSMEs and to the agriculture industry, which are required by the Philippine government amongst the local banks,” said Duarte.