Unionbank to link rural banks using blockchain

Jessica Fenol and Michelle Ong, ABS-CBN News

Posted at May 21 2018 12:30 PM | Updated as of May 21 2018 02:58 PM

MANILA - (UPDATE) Unionbank said Monday it would tap blockchain to connect rural banks in the same way systems such as Bancnet and SWIFT link larger lenders.

Six rural banks will be included in the pilot run, which was approved by the Bangko Sentral ng Pilipinas. With blockchain, the number of steps to complete some transactions will be brought down to 3 from 20, said Unionbank chairman Justo Ortiz.

Blockchain can help "crack the code of financial inclusivity," Ortiz said during the launch of the Blockchain Association of the Philippines.

"The rural banks are the first mile to getting those members of the community that are unbanked," Ortiz said.

Banks will soon find more applications for the blockchain technology, Ortiz said.

Ortiz said Unionbank would triple its blockchain programmer workforce to around 100 by the end of the year from the current 30. The company hopes to grow this to 20,000 in 2 years, he said.

"We need to be able to bring people from abroad to basically up the game here at the enterprise level. At the end of the day, if the enterprises adopt, it will force the individuals to adopt. It's chicken and egg," he said. 

Ortiz also chairs the Blockchain Association of the Philippines which will be formally launched on May 28. He said he hoped the industry would soon overcome birth pains.

"Eventually it becomes easy. We now have everything that you do on internet today," he said.