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Lateral thinking has the capacity to adjust bearings, change patterns, find solutions. It can even transform lives. For Edwin Bautista, President and CEO of Union Bank of the Philippines (UnionBank), his less obvious choice of study was his making. When it came time to make a decision about university, he paid attention to his family elders and has never looked back.
“I pursued a degree in engineering because my father, uncle and grandfather gave me the advice, ‘If you want to succeed in the corporate world, take up engineering. That’s what the Industrial Revolution is all about,’” he tells The CEO Magazine. “I did not expect the internet revolution, but engineering helped to prepare me and has taken me to where I am today. And the rest, as they say, is history.”
Edwin calls himself a storyteller, and there’s little doubt there’s more than a grain of truth in his suggestion. He is a firm believer that industry and business leaders must be able to “articulate a compelling vision”, and he has certainly done that by providing UnionBank with a clear blueprint for the future. His ability to relate and connect with people from all walks of life through his skill as a narrator helps him to inspire the teams he leads.
“A CEO must be able to take products, services and experiences, and weave them into inspiring brand stories that bring the brand to life for customers and team members alike,” he asserts. “I have been known for being an innovator, a marketing guru and a good storyteller.
“I have used these to guide many seasoned and aspiring marketers to deliver work that matters in building brands that make a difference in the lives of the customers we serve. My team says they know things are going to get exciting when I stand in front of a whiteboard to draw out innovation or marketing frameworks that, without fail, provide clarity and an aspiring vision to work towards.”
His capacity to dictate a clear vision was apparent very early. While earning his mechanical engineering degree and a Master of Business Administration from Harvard Business School, he held numerous student leadership positions and built a reputation for “getting things done” by inspiring others.
“A CEO must be able to take products, services and experiences, and weave them into inspiring brand stories that bring the brand to life for customers and team members alike.”
He was the team captain of the De La Salle University debating team, which won the national intercollegiate championships. He was also the first recipient of the Brother Gabriel Conon Award for Most Outstanding Graduate.
Edwin began his career as Brand Manager at Procter & Gamble in the fast-moving consumer goods industry and contributed to the team that enabled Safeguard soap to reach a 50 per cent market share from just 10 per cent “by challenging conventional thinking”, he says.
He then took on the role of President of the International Exchange Bank until its merger with UnionBank, and was also Vice President and Head of Citibank’s Global Transaction Services Group in the Philippines.
“Citibank asked me to join them in 1990 to set up the Transaction Banking product management group. They wanted it patterned after Procter & Gamble,” Edwin recalls.
“It was a challenging task, but one that was hard to resist. What followed was a flurry of new product introductions in the Philippines by Citibank. We won Best New Product Introductions in Citibank Asia–Pacific for three years in a row. I quickly realised that I could be effective and successful in banking, so I stayed in the industry.”
He joined UnionBank in 1997 as Senior Vice President and has filled leadership roles in its transaction banking, credit cards, retail banking, auto and mortgage, corporate product banking and digital banking divisions.
Five years ago, UnionBank embarked on a course of transforming its entire operations with a comprehensive program that would take it to a fully digital future. It was an ambitious venture, but one Edwin felt was imperative for the longer-term. His intuition was backed up by an independent report, which struck home hard and acted as a catalyst for major remedial action in the bank.
“When we started our digital transformation journey five years ago, we commissioned a world-class management consultant group to help us define the future of banking amid the tremendous economic, technological and demographic changes around us,” he says. “Their conclusion and recommendations hit us like a bullet because they said the only way forward was to digitise or perish. What we expected to be a strategic plan overhaul became an existential threat.
“In 2016, we started the biggest preparation for disruption via our digital transformation. Back then, we anticipated that customer behaviour and needs would drastically change due to the rapid acceptance of mobile digital technology such as smartphones, smartpads, the use of apps and so on.
“Fast-forward to today and this digital strategy – which included creating a new tech-enabled and agile UnionBank organisation aside from building a best-in-class IT infrastructure to support and sustain our operations – paved the way for us to continue doing business as usual, even while working from home because of the ongoing pandemic.”
To ensure that the bank is geared for a future in which banking is a fully remote daily activity for customers, with a decentralised operation, UnionBank invested in its own technology and innovation company, UBX, as a foundation of its future banking vision.
“Technology is a key enabler of our goal of digital ‘hygiene’.”
The objective of UBX, Edwin says, is to use “emerging technologies such as distributed ledger technologies or the token economy, engage fintechs to learn more about the financial landscape’s future direction, and make technology its core to deliver platforms where financial services can be embedded”.
His reasoning also enables UnionBank to become more accessible and attractive to people and businesses that are currently not tied to any banks in the Philippines. By bringing them into the banking fold, it is hoped that the nation’s prosperity will be more universally shared.
Of course, the COVID-19 pandemic has interfered with the bank’s plans and its business operations. But because it has moved significantly down the digital transformation path, the ramifications of the pandemic are not as profound as they might have been.
Many businesses – and other banks – were caught unawares by the pandemic, but UnionBank’s digital progress meant its shift to online activities in response to COVID-19 was a quick and seamless adjustment.
Edwin is particularly proud of the fact that UnionBank was the only Philippine bank recognised in the top 10 Most Helpful Banks in Asia–Pacific During COVID-19, according to a BankQuality.com consumer survey. The survey talked to 11,000 respondents from numerous Asian countries including China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
“The minute the enhanced community quarantine was announced, we swiftly transitioned to a work-from-home scenario,” Edwin says. “In the beginning, 90 per cent of UnionBankers were working from home, including our operations team, marketing team and customer service team. Remarkably, all major bank operations continued to run very smoothly.”
The bank’s staff used digital tools to enable a smooth transition to remote operations and managed to maintain uninterrupted operations during the worst of the pandemic. Most of the bank’s branches offered full banking services with full safety procedures in place, and the bank’s apps and digital platforms enabled customers to complete transactions from home.
“It warms our hearts to know that our customers recognise and value our focused and dedicated efforts during this crisis,” Edwin shares. “The coronavirus pandemic has brought the world an unprecedented disruption, but with each of us doing our share, we will weather this challenge, no matter how massive it can be.”
Indeed, the bank recorded a strong start to 2021, with a net income of PHP4.7 billion (US$90 million) in the first quarter, a 79 per cent jump on the same period last year and 53 per cent higher quarter on quarter.
UnionBank’s ability to withstand the shocks of the pandemic have emphasised the importance of continuing on its digital transformation journey.
Edwin has in his sights a reputation as the best digital bank using state-of-the-art technology to provide unparalleled customer services, with 24/7 availability, Six-Sigma reliability, streamlined procedures and, of course, completely secure transactions. This will ultimately deliver superior customer experiences through digital touchpoints.
“This also entails becoming the best mass-market bank by using technology to improve operational efficiencies to capture and better service the unbanked and underbanked segments in the country, in line with the bank’s goal of achieving inclusive prosperity,” he enthuses.
“Technology is a key enabler of our goal of digital ‘hygiene’. Robotic process automation and business process automation enable us to digitise manual processes and make processing faster and more available to our customers. For example, The Ark is an app that enables customers to open an account and transact without needing to go to a branch.
“Data science and artificial intelligence allow us to analyse customer behaviour so we can provide the right products and services for them, and we can respond to customer feedback and launch enhancements across our digital platforms.”
Edwin believes the advent of the coronavirus crisis emphasised that UnionBank has a higher purpose of extending digital banking to the mass market and those with no bank affiliation. “Post-COVID-19, we will intensify our advocacy to tech up industries so that they too can digitally transform their businesses and be able to withstand disruptions when the time comes,” he says.
“We recently launched InstaPay 2.0, which enables fund transfers by inputting mobile numbers or email addresses. And small businesses can now open their business accounts and perform banking transactions digitally with the launch of our SME Business Banking app.”
While UnionBank’s migration to a fully digital future is centred around introducing and perfecting digital technology as a means of improving its internal and external performance, and setting up a sophisticated customer platform, it is not all about technology, Edwin says.
“It is also about cultural transformation. It has been a catalyst for disruption; so much so that we recognise that to be good at it, we had to change our essence. UnionBank’s corporate culture is innovative, given our long history of being pioneers when it comes to innovation, technology and digital banking. It is also open and collaborative.
“All the units in UnionBank work towards a common goal and a higher purpose. We come up with relevant solutions because we are open to collaborating with our customers. We’re also agile. We’re organised in such a way that we are quick to pivot. Our people are trained to quickly address changes in customer behaviour and to learn, unlearn and relearn skills to keep up with the changing times.”
That agility will be necessary in the future as global banking and finance management change over the next decade or more. Edwin envisages that more broadly, the pandemic has precipitated the beginning of the end of hard cash, especially when central banks are hampered in their ability to deliver hard currency to banks and ATMs nationwide.
“The longer the disruption, the more tenuous the traditional cash supply chain becomes,” he explains. “Banks will be more open to testing, developing and deploying platforms and embedding financial services onto them, and maybe even widely adopting blockchain, cryptocurrencies and digital tokens.”
“While everyone respects a CEO for his intelligence and sharp insights, it is his ability to relate to people from all walks of life that captures the hearts of the teams he leads.”
Edwin can see that that turn of events will benefit banks which invested early and heavily in digital technology. He predicts that most of the 70 per cent of the Philippine population with no bank connection will shift towards digital, presenting new opportunities for banking.
The pandemic also threw into perspective the need for the country to invest in and nurture small enterprises on which the country relies so heavily for its economic development, employment growth and social cohesion. Small businesses are fundamental to the country’s future wellbeing.
“Post-pandemic, and as far as banking in the Philippines is concerned, I believe we need concrete plans to grow SMEs and not just the established corporates – especially because these SMEs are the lifeblood of the countryside,” he points out. “They grow our crops, they catch our fish and they are the subcontractors for our big manufacturers and big retailers. With the help of our regulators, I hope that there will be more incentives and new ways to lower our lending costs so that all banks can redeploy more of their loans portfolio to this sector.
“In terms of industry skew, I believe banks should look at providing more support to SMEs who do local manufacturing, especially where most raw materials are available locally. The more manufacturing hubs the better – not only for more inclusive income growth but also to learn from how vulnerable the current supply chain logistics are.”
Edwin hesitates to nominate how fast this future may materialise, but he is confident that UnionBank is prepared to meet all the challenges and opportunities the future will bring. And while he considers himself flexible and adaptable enough for any eventuality, it is really his willingness to connect with people that is his strongest suit.
“Working in different industries such as FMCG and banking prepared me to be flexible and to embrace change,” he says. “But while everyone respects a CEO for his intelligence and sharp insights, it is his ability to relate to people from all walks of life that captures the hearts of the teams he leads.”