Philippines’ UnionBank turns to distributed ledger technology to foster growth of SMEs

Financial institution UnionBank has revealed its plan to stimulate growth for the Philippines’ small and medium enterprises (SMEs). According to Business Mirror, a local financial publication, the move by the commercial bank will involve using distributed ledger technology (DLT) to streamline processes in the ecosystem.

The bank’s Innovation Campus in San Pedro, Laguna, has been charged with the duty to attain lofty goals while interfacing with local government agencies. The plan to transition from traditional brick-and-mortar processes to increased digitization has been touted to offer several benefits for SMEs.

One of the proposed benefits advanced by analysts is the diversity of funding available to SMEs through the array of decentralized finance (DeFi) protocols in the space. Furthermore, the use of DLT has the potential to foster trust between parties in a transaction and improve the current state of logistics for the firms as they look to scale their operations.

“We will encourage them to embark on a digital transformation and later develop a unique value proposition in the local and international markets,” said Dennis Omila, UnionBank’s chief information officer. “It is part of our ecosystem from a technology perspective and exposes our capabilities to them.”

The bank’s plan to help SMEs achieve digitization will see the institution experiment with the metaverse with the Innovation Campus billed to serve as a “co-creation site for blockchain solutions.”

Ramon Duarte, Project Head of UnionBank Innovation Campus, confirmed the plans in an interview with Business Mirror, where he said that the country has massive potential for metaverse, and in harnessing it, “the campus is also planning to launch a metaverse center of excellence.”

The Philippines’ march toward embracing DLT

A recent survey by Ciena opined that most Filipino workers are tilting toward working in virtual worlds rather than in the traditional office. The study noted that the respondents were already comfortable with video conferencing tools, and the next leap would be meetings in the metaverse.

“Filipino business professionals are clearly comfortable with virtual meetings and, for the early adopters, ready to move to the metaverse,” said Dion Leung, Ciena’s managing director in Southeast Asia.

Already, a sizeable chunk of Filipinos are conversant with Web 3.0 technologies and virtual currencies because of their stints with Axie Infinity, a gaming platform relying on DLT that gained popularity in the country during the thick of the pandemic. The country has also been posting positive figures in terms of digital asset usage, ranking the highest in the region for transaction volumes on peer-to-peer (P2P) exchanges.

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