UNO Digital Bank: Bridging Financial Inclusion through Digital Innovation Qorus-Infosys Finacle Banking Innovation Awards 2024

UNO Digital Bank empowers anyone, anywhere to transact, save, borrow, and invest securely and conveniently through its innovative digital platform. The bank’s ethos guides its focus on driving financial inclusion and enhancing customer experience through innovative digital banking solutions. The core concept revolves around providing accessible high-yield savings accounts, flexible deposit options, and affordable credit facilities to unbanked and underbanked populations. By leveraging strategic partnerships and advanced technologies, UNO Digital Bank aims to create a seamless, user-friendly banking experience that empowers individuals and small businesses.

A specific example was its integration with the Philippines’ leading e-wallet with over 81M users. Through this innovation, UNO provided banking products to its 81M user base, all without the users needing to leave the wallet’s app. End-to-end account creation could be done in 1 minute, among the fastest e-KYCs in the country! With the majority of Filipinos remaining to be unbanked, UNO has tapped a previously underserved market. UNO has provided financial products to individuals who previously lacked access to, and were victims of loan sharks and other dubious financial products that are prevalent in the Philippines.

UNO has also innovated by being the first and only digital bank to offer insurance products through its integration with a leading insurance provider, giving full access to a suite of insurance products, and even bundling them with UNO’s products so customers may not only be first time bankers, but first time insurers as well. UNO has remained committed not only to providing valuable service to its customers, but also to increase the level of financial literacy and independence among Filipinos.

In order to make the lives of Filipinos more convenient, UNO has also integrated with a leading bills payment company, so its customers may no longer need to physically go to Bayad centers and instead pay within a touch of a button through UNO’s app.

UNO has designed its app to be easily integrated so that it can scale through partnerships much faster than going through traditional and inefficient self scale-ups.

Through these integrations, UNO customers no longer need to leave their app to be able to do banking/payment/insurance activities. All activities can now be done on the UNO app, accessible anywhere and to anyone in the country.

Reasons Behind: The primary motivation behind UNO Digital Bank’s initiatives is to address the significant barriers that prevent a large portion of the Filipino population from accessing formal financial services. High costs, stringent documentation requirements, and geographical barriers have left many without access to banking. Additionally, gig economy workers and small business owners face financial instability and operational inefficiencies due to a lack of formal financial support. Gig economy workers have primarily been targets of loan sharks which are highly prevalent in the Philippine lending landscape. By targeting these pain points, UNO Digital Bank seeks to foster financial inclusion, promote economic empowerment, and improve the overall financial well-being of its customers. UNO has found the perfect gap in the market to tap a young, digitally-savvy base, as primary customers of its products.

State of Competition: The competitive landscape in the Philippines’ banking sector includes traditional banks, digital-only banks, and fintech companies. While traditional banks dominate the market, they often fail to cater to the needs of unbanked and underbanked populations due to their conventional business models and high operational costs. Digital banks and fintech companies are beginning to make inroads, but many still struggle to provide comprehensive solutions that address the unique challenges faced by underserved communities. The Bangko Sentral ng Pilipinas (BSP) reports that 56 percent of Filipinos had bank accounts as of 2021, up from 23 percent in 2017. However, a total of 34.3 million adults are still unbanked. The BSP is hoping to hit 70 percent in overall financial inclusion in 2024 which is broadly an ambitious target, but with the likes of UNO Digital Bank which has access to a highly unbanked population, it may eventually seem attainable. UNO has been able to differentiate itself by offering tailored financial products and leveraging strategic partnerships to create an inclusive and efficient banking ecosystem. UNO’s partnerships provide them access to an unbanked but prime segment to be served entry-level financial products.

Departments Involved:

UNO Digital Bank’s project delivery teams involve collaboration across multiple departments, including: Product Development: Focuses on designing and refining financial products that meet the needs of unbanked and underbanked populations. Technology and IT: Responsible for developing and maintaining the digital platform, ensuring security, scalability, and efficiency. Partnerships and Alliances: Manages relationships with strategic partners to integrate and expand banking services. Marketing and Customer Engagement: Works on promoting the bank’s offerings and enhancing customer interactions through targeted campaigns and user-friendly interfaces. Operations: Ensures smooth implementation and management of the bank’s services, focusing on operational efficiency and customer satisfaction.

Main Results So Far: UNO Digital Bank has achieved significant milestones since its inception: Customer Growth: 1.5 million customers acquired within 20 months, with well more than USD 100 million in deposits, highlighting the bank’s rapid adoption and market trust. Loans: More than 100K loans were handed out in the first year alone, demonstrating strong customer engagement and confidence in the bank’s offerings. Insurance: First and only digital bank to offer insurance products directly through its app. Game-changing in providing access to an unbanked population to key insurance products that can create financial stability and protection. Financial Inclusion: Approximately 32% of new accounts are from first-time bank users, showcasing the bank’s impact on financial inclusion. Recognition and Awards: Ranked 6th in Forbes' list of Best Banks in the Philippines and CNBC’s list of banks preferred by customers in 2024. Received the Open Banking Initiative of the Year at the Asia Banking and Finance Awards 2023, and recognized as the Digital Banker of the Year in Asia-Pacific at the World Digital Bank Awards 2023. App store rating of 4.5, 2nd best among all digital banks in the country