Union Bank of the Philippines’ fintech subsidiary UBX, has tapped OneConnect to build and implement the country’s first blockchain platform. The partnership aims to make various loans and financing products available to micro, small and medium enterprises (MSMEs). OneConnect is an associate of the Ping An Insurance (Group) Company of China, Ltd.
According to the central bank of the Philippines, the SMEs and MSMEs make up about 99.5% of all the businesses in the Philippines but they only receive 9.2% of the total loans and financing from major banks due to low creditworthiness and lack of financial statements and credit histories.
The platform will leverage OneConnect’s facial recognition technology, micro-expression interviewing technology, and big data-enabled artificial intelligence for credit assessment, loan disbursement, and anti-fraud checking. This will allow UBX provide supply chain financing while enabling paperless contracts, contract judgement, compliance verification and financing risk assessment. The usage of technology is expected to reduce approval time for loans while providing more accurate risk assessment.
The platform will have its soft launch by end of 2019 and is expected to be fully implemented by 2020.
Union Bank of the Philippines also recently piloted i2i, a blockchain-enabled cross-border remittance service for rural banks, successfully transferring a tokenized fiat from OCBC Bank in Singapore to a rural bank in Surigao Del Sur province, south of the Philippines. Rural banks in the Philippines have limited access to financial networks and clearing systems, and remittances from abroad end up taking days to be credited to onshore accounts. i2i will enable rural banks to receive direct-to-account remittances.
(Sources: Ledger Insights; PR Newswire; Business Mirror; Business World)