UNO Digital Bank targeting to capture unbanked in big cities

UNO Digital Bank wants to capture the underserved and unbanked in the country’s biggest cities as it gears up for its targeted second-quarter launch.

“The opportunity itself in the big cities first — in the NCR (National Capital Region), in Davao — is huge,” UNO Digital Bank Co-founder and Chief Executive Officer Manish Bhai said in a media roundtable held in Makati on Tuesday evening.

“First, you need to get that fixed and then kind of expand. It’s the same in many countries today. I think people are getting comfortable with digital even on small islands — everywhere,” he added.

The bank targets to start operating within this quarter after finalizing regulatory matters with the Bangko Sentral ng Pilipinas (BSP).

UNO Digital Bank’s goal to help bridge the financial inclusion gap will go beyond account creation as they aim to ensure credit will become more accessible to previously unbanked and underserved individuals, Mr. Bhai said, noting that only 10% of Filipinos currently have access to loans from banks.

“I think within the mass market, we’re talking about credit [for the] underserved, the underbanked, which, again, are significant buckets. [There are] different products being mentioned, different age classifications, different scales of employment — some are self-employed, some are professionals, income levels vary,” said Vivek Kumar, UNO Digital Bank head for Loans, Payments & Ecosystems.

Mr. Kumar said the bank also wants to make loan applications “cheaper and faster.”

“There shouldn’t be any reason their loan application should take more than a few minutes if they qualify,” he said.

Meanwhile, Mr. Bhai said they will tap alternative credit data, including those on mobile behavior, social media, and online consumption behavior in ride-hailing and food ordering platforms, among others.

Amid emerging cybersecurity risks, the bank said it is putting in place safeguards to protect their potential clients from fraud and losses from unauthorized transactions.

Chito Africa, head of Technology at UNO Digital Bank, said they will use biometrics to ensure clients are protected, among others.

“If it’s (transaction) out of [usual] behavior, maybe questionable, [then] we will not allow the transaction to push through. We will also do a different monitoring to tell us if there are people trying to get into our system that are not supposed to be there,” Mr. Africa said.    

Meanwhile, Mr. Bhai said their services will only be available via an app as it will not set up a web platform to prevent cybersecurity risks.

“We are only going to have the app, we are not going to have a web version because a lot of research showed the app is much more secure than a web interface,” he said.

“It also boils down to a lot of consumer education, which is our plan,” Mr. Bhai added, noting information on cybersecurity risks will be integrated in their app.

UNO Digital Bank is backed by Singapore-headquartered DigibankASIA Pte. Ltd. It secured its digital banking license from the BSP in June 2021.

Digital banks offer services via online platforms and do not need to establish branches.

The central bank expects these lenders to help it reach its goal to have 70% of Filipino adults become part of the formal financial system by 2023. — L.W.T. Noble