Innovation

During the height of the pandemic, BDO Unibank, Inc. launched different digital platforms to cater convenience for our client's financial needs and transactions.

BDO Pay and BDO Pay Account

This is a payment application that provides our depositors a seamless experience for everyday financial transactions. It is linked to our clients' deposit accounts and credit cards which eliminates the cash-in step and gives our clients easier ways to send money to anyone and pay their bills or utilities.

BDO Checkout

It is an online payment solution that allows businesses of all sizes to accept credit card, debit card and mobile wallet payments even without a website or outside of the large e-commerce platforms.

Biometrics-enabled ATM's

BDO Unibank, Inc's is the first bank to pioneer Biometrics-enabled ATM's. This uses fingerprint and face recognition technology in authenticating transactions for balance inquiry and cash withdrawals. It also allows our clients to provide specific data in each transaction to maintain multi-factor authentication.

Agency Banking with Cash Agad

This banking solution allowed debit and prepaid cardholders to perform banking transactions through point-of-sale (POS) machines our partner agents, such as sari-sari stores, groceries, pawnshops, hardware shops, cooperatives and other local establishments. Due to the limited mobility brought by the pandemic, our partner agents became the main option for people to transact cash in remote areas and provinces all over the country.

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Inspiration

BDO Unibank, Inc's digital platforms allowed our clients to continue going about their business and personal financial responsibilities despite the pandemic. It gave a semblance if the old normal, but offered the assurances demanded by the current pandemic situation.

Its main components for our clients are:

- Convenience: Financial transactions are 24/7 even in the comfort of their own homes

- Safety: Online banking significantly reduced the need to go out and use potentially contaminated machines, reducing the risks of catching the virus

- Reduced Carbon Footprint: The result of decreased travel for bank or business transactions

With my talk with Sir Sonny Maroon, he shared that "these pioneer innovations of BDO Unibank, Inc. through digital banking shows how our bank is putting extensive effort to help the Filipino people for their banking convenience. We always live up to our slogan, "we find ways" to serve our clients and the Filipinos in any way we can."

Overall impact

During the height of the pandemic and the observance of the lockdowns, the volume of online transactions reached record highs. People shifted to digital technology for their everyday financial transaction needs.

There was a 31% rise in digital banking in our company. The Impact was universal, cutting across personal online banking channels and new payment solutions for merchants.

BDO Unibank, Inc's Cash Management Footprint

Our bank has the most comprehensive branch network, becoming one of the country's biggest providers of Cash Management Services (CMS). At the height of the pandemic, our bank facilitated digital and non-digital cash management services. Access to cash, primarily through payments and collections, became crucial to the survival and recovery of businesses and individual clients.

Last year, our company's cash management's total client base reached 61,277. 42% of these were either newly on-boarded into Cash Management Services or expanded their businesses by signing up for our cash management products. Total cash management transactions from last year rose to over 100 million, with a value of more than 8 trillion pesos in processed transactions for collections and payments combined.

Our Cash Management Services team continued and focused on introducing, educating, and migrating customers to digital products and services. They also continued to leverage the strength and convenience of BDO Channels in providing digital solutions so that clients can continue to bank safely from their homes and offices.

Our company also focused on Small and Medium Enterprises (SMEs), which were hit hardest by the pandemic. With our company's efforts, the move resulted in significant percentage gains of 83% from both new clients and new availments.

Business benefit

The launch of the new digital platforms enabled our company to increase our profits and transactions.

BDO Pay Account is in line with the digital transformation roadmap of the Bangko Sentral ng Pilipinas (BSP) to provide bank accounts to at least 70% Filipinos by 2023. It was developed to focus on the unbanked sector, including consumers in rural and remote areas.

Just last year, our company recorded a 33% growth in transactions through this application with a total value of over 1.5 trillion pesos. The growth was largely fueled by the online fund transfers to BDO and other bank accounts as well as bills payment transactions.

BDO Checkout paved the way for a transaction value of more than 100 million pesos from helping individual sellers and other small business owners.

Client response to the biometrics-enabled ATM's has been very positive in favor of security measures and convenience. More than 1,200 machines have been converted with majority of it in the National Capital Region.

During the past year, Cash Agad has continued to grow with increased transactions at over 60 million from the previous year's 40 million. Total cash withdrawals went up to over 260 million from 176 million. The partner agents network drastically increased from more than 8,000 to more than 9,500 which covered 88% of municipalities all over the country.

Our company recorded a net income (51% increase) of 42.8 billion pesos just last year from 28.2 billion the year prior.

Full year profits were boosted by a 11% increase in non-interest income and normalized provisions. This reflects our company's operational resiliency notwithstanding COVID-19 related headwinds depressing loan activity for the past year.

For the full year, total deposits increased to 8%, Year on Year, driven by the expansion in current and savings account deposits which was a testament to the strength of the bank.

Our company continues to invest in our digital platforms and infrastructure, allowing it to make banking services more accessible and easier to use. In addition to the mobile wallet, BDO Pay, that was launched just last year, our clients can also avail of fully digital account opening, paperless in-branch transactions, and card-less ATM banking using biometrics and QR codes.

Social and environmental benefit

Our company's Cash Management Team forged partnerships in support of the bank's Product Sustainability Strategy that commits to providing banking access to the underserved. They provided access to cash machines in collaboration with ATM providers who can install ATMs at an accelerated pace and use cash recycling, reducing efforts and optimizing cash companies or e-Money providers to accelerate financial inclusion further. They are also consciously seeking out business partners with particular objectives aligned with BDO's Sustainability Framework.

Over the years, our company has adhered to sustainable finance practices that long incorporated Environmental, Social, and Governance (ESG) as we conduct our businesses committed to sustainability.

Our company has abided by our Social Environmental Management System Policy, which risk-categorizes all corporate and commercial borrowing accounts according to their social and environmental impact since 2010. Our company's SEMS Policy was co-developed with the International Finance Corporation (IFC) and based on IFC standards. SEMS categorizes ESG risks as High, Medium, and Low based on type (industry/sector), location (proximity to environmentally and socially sensitive areas), sensitivity (potential impact, whether irreversible/reversible), and extent of environmental/social issues.

Our company's SEMS policy prohibits the financing of any activity engaged in the following:

- production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements or subject to international bans

- production or trade in weapons and munitions, gambling, online gaming, and equivalent enterprises

- any business related to pornography or prostitution

- production or activities involving harmful exploitative forms of forced labor / dangerous child labor

- commercial logging operations in primary tropical moist forest

- production or trade in wood or other forestry products than from sustainability-managed forests, among others.

Throughout the pandemic, our company continued to ensure the safety of customers and employees, especially with banking considered an essential economic service. Approximately 99% of our employees are fully vaccinated, with an additional 47% receiving booster shots throughout the year.

Sir Sonny Maroon shared during the last part of our interview that "BDO Unibank, Inc.'s is fully committed in incorporating Sustainability in the way our company does business and integrating Sustainability principles when making decisions, assessing relationships and creating products."

Ms. Marianne Rapadas shared that "Our bank has boosted our Sustainability efforts to better serve our clients and its own employees. With these pioneer innovations, it has made banking more accessible and convenient for all our clients.

She also reiterated that our company is "putting Sustainable society and communities at the heart of our operations to promote collaboration between stakeholders from all parts of the community".

This can be found in a video uploaded by our company entitled: BDO Unibank: Philippine banks must drive sustainability and find ways to reach the unbanked.

Link: https://www.youtube.com/watch?v=LaTdOf0krZ4

Interviews

Michael James P. Maroon, Unit Head - Product Management - Institutional Services

Marianne M. Rapadas, Sustainability Impact Analytics Manager