SUCCESS STORY

Union

Bank

Transforming from a bank to a data technology company with banking utilities

Innovation Challenge

By 2018, UnionBank of the Philippines had become the 7th largest bank in the country. However they knew they couldn’t afford to simply keep playing catchup - in order to overtake the larger banks they would have to do something different.

They say if you don’t disrupt yourself, someone else will - so that’s exactly what UnionBank set out to do. The bank had been first in the Philippines for a lot of things: first in internet banking, first with an Open API platform, and many others. They were no strangers to innovation.

Their leadership team had been keeping a keen eye on the rapid changes facing their industry with the introduction of non-traditional banking players such as digital wallets and pure-play digital banks.

The board recognised that their next stage of growth would come from riding this wave of change driven by tech companies, where they kept hearing that data would be the new currency. As a bank still based on holding traditional currency, they knew they needed to change, setting themselves a lofty ambition to become a data technology company.

The UnionBank transformation project team, led by Amer Iqbal and Roshan Chhotu of 5 Ways to Innovate

Innovation Ambition

Leapfrog the competition by transforming from a bank to a data technology company with banking utilities.

The transformation journey was designed with some key guiding principles:

  • Copycats can’t catch up: Following in the footsteps of the market leaders would simply keep them in 7th place at best - leapfrogging needs a different approach

  • Portfolio, not project: Solving the question of “what business are we in” won’t be done in one go, they needed a factory to consistently generate and test new propositions

  • Tech is just an equaliser: Simply investing in technology wouldn’t be a game changer without also investing in people, process and data capabilities

  • Don’t just build a better bank: Deprioritise any initiatives that simply make us operate as a more efficient version of today’s business

Solution

Build a startup studio that can reliably generate a stream of new data technology products from within

How we did it

“We don’t need a speedboat - we need a speedboat factory”
Our goal was not to build the data technology business of tomorrow, but to build a factory that could sustainably launch many startups to explore and experiment with data technology propositions that could be scaled into tomorrow’s business.

Inspire

Inspire your leadership team to take action on innovation.

  • Invited UnionBank project sponsors to see Amer deliver his 5 Ways to Innovate keynote presentation at a major industry conference. This gave them an opportunity to engage in the community discussion amongst their industry peers and buy into the approach

  • Series of Leadership offsites to map out the future state vision for the transformation

  • Departmental onboarding sessions to enable each business function to understand and take ownership of their role in the transformation effort

Plan

Build an optimal innovation portfolio & playbook to execute.

  • Assessment of current capabilities that helped pivot the strategy from an invested “upskilling” approach to a balanced “startup studio” approach that was better suited to the organisation’s ability to execute

  • Established a co-resourced project team who were tasked to build an internal “venture factory” that could sustainably launch many start-ups to explore and experiment with data technology propositions

  • Set up the necessary environment in which startups could succeed, including supporting functions like venture funding and a portfolio management system

  • Built the playbook for this unit to take over ownership of the venture factory as we shifted from the ‘design’ and ‘build’ phase into the ‘run’ phase

Guide

Coach your leaders to build innovation capabilities from within.

  • Worked closely with the venture factory team to get the new startups prioritised and stood up

  • Augmented startup teams with specialist capabilities where needed to get them operational

  • Handed over all of these capabilities and shifted into a low-touch mentoring role after the first three sprints

  • Provided ad-hoc executive coaching where needed to problem solve specific topics with CEO, CHRO and CTO

Outcomes

Innovation is a long-term, ongoing process. Our work enabled UnionBank to build the capabilities needed to consistently generate transformative efforts from within. Some of the immediate results of our work included the following:

Quantitative Results

Within the first 6 months, the startup studio launched 5 data-focused startups including a blockchain solution for rural banking, a retail POS solution and a digital growth platform for small businesses.

Qualitative Results

Not only has UnionBank since won numerous awards for innovation, but several of the startups have also been recognised including 2018 Most Innovative Digital Banking Product Philippines.

“When we embarked on this project, we saw the impact of new ways of working in about two months.”

Michelle Rubio
Chief Human Resources Officer

“We have pockets of agile teams, we have pockets of innovative groups, but how do you scale that out across an entire organisation? You cannot do that in pockets, you have to do that holistically - and that’s where (the project team) is helping us”

Henry Aguda
Chief Transformation Officer

Want more?

If you’d like to learn more about how UnionBank is executing their innovation process to transform from today’s banking business to tomorrow’s data technology business, you may find this video interesting.