Speed to the Cloud: UnionDigital Bank Launches Financial Services Targeting the Millions of Unbanked Filipinos

Not having a bank account doesn’t mean being a bad credit risk. Tens of millions of people in the Philippines have no access to financial services. Many of them need could use a bank loan and would be able to repay it. It’s just that they have no bank accounts and that many --if not most-- banks aren’t geared to meet the needs of customers who require microlending.

However, borrowing money is for many families the first step start on the prosperity journey, enabling the purchase of a house or the launch of a business. And put together, unbanked Filipinos represent a large untapped market opportunity. UnionDigital Bank aspired to be the local bank that served this segment and enabled ordinary Filipino families to be financially empowered and move forward towards a brighter future.

In August 2023, Huawei partnered up with Sunline, a Chinese financial technology firm, to enable UnionDigital Bank in the Philippines build a next-generation core platform for loan services. Amazingly, the delivery of the project took a mere 35 days. The new platform opens the door for millions of unbanked Filipinos to gain access to financial services.

"In the Philippines, it's this population of about 70 to 80 million people that make less than 10,000 pesos or 200 dollars per month. They still remain unbanked," said Ron Puno, UnionDigital's Chief Technology and Transformation Officer. "So, one of the things that they really need is financial assistance. How do we extend loans out to them in a faraway area very quickly? The only way to do that, we think, is through digital means."

UnionDigital was one of the first institutions to receive a digital banking license in the Philippines. The bank has adopted an ecosystem-based strategy to provide easy-to-use, accessible, relevant, reliable, and secure financial products and services for underserved individuals, small businesses, and communities. UnionDigital aims to promote inclusive development by offering banking services that are underpinned by digital and intelligent technologies.

UnionDigital needed to scale up its core system to achieve this though. This included deploying a loan service platform with microlending capabilities. But these upgrades would have to comply with the central bank's regulatory standards, and allow UnionDigital to provide scenario-specific financial services for mid- and low-income customers, all while guaranteeing stability even during user and transaction surges.

Following a stringent assessment, UnionDigital gave the nod to its existing partner Huawei for the cloud infrastructure that would underpin this project. Huawei, in turn, partnered with a leading service provider, the Chinese fintech firm Sunline, to deploy the new system.

Sunline is the first major Chinese fintech firm to venture overseas. Its vision is to become a global provider of digital finance consulting solutions and services. It was among the first companies to join Huawei's Financial Partner Go Global Program (FPGGP) Acceleration Program where it sits on the board of directors. Thanks to their complementary strengths, Sunline and Huawei have delivered several successful projects in the past.

UnionDigital and Huawei kicked off the project in August 2023, with Sunline joining in September. The three partners agreed on an extremely aggressive timeline that had the core system launching a mere 35 days after kickoff. Such rapid deployment was necessary to enable the UnionDigital to comply with the central bank's regulatory standards. This was the first time that Huawei was involved in moving a core banking system to the Cloud.

"During my many years working with Huawei, I think two things stood out,” says Song Yu, Senior Deputy Director of Sunline's delivery center and a member of the project team. “All of our components can be supported by Huawei Cloud. No matter what technical problems we face, we can find a solution on the Huawei side. Not only that, our products also work well with Huawei Cloud. Our joint solution has been able to integrate our two companies' strengths thanks to the amount of time we've spent on pre-integration and optimization in the lab."

Generally, a project of this scale takes three to six months to implement and deliver. Given the 35-day deadline, Huawei and Sunline mobilized a large number of senior experts to make it happen. UnionDigital was impressed and the project has played a key role in helping win new customers and secure the largest market share in the Philippines.

"Once people start to tell other people that you can rely on this, then more and more people will use it,” Puno predicts. “It will change how banking is done in the Philippines… [but] we don't know when that moment will happen. We don't know if it will be just a few people over time. We don't know if it will be everyone overnight."

A large number of loan applications are now being processed every day through this system. This has helped UnionDigital to rank among the top in terms of FinTech in the Philippines. And millions of Filipinos now can see new financial pathways opening up before them where there were only roadblocks until recently.

Strengthened by this experience, Huawei will continue working with Sunline and other partners to help more banking customers worldwide to benefit from digital finance. Through joint solution innovation, Huawei plans to work with its partners to promote the transformation and upgrade of financial institutions, accelerate their digitalization and intelligence, and provide customers with better, efficient, secure, and innovative products, solutions, and services.