Unionbank Of The Philippines Launches Blockchain Initiative For Rural Banksbr>
Union Bank of the Philippines has launched a blockchain initiative to help rural banks integrate with the country’s main financial network.
Called Project i2i, the initiative is utilizing Kaleido, a blockchain platform developed by ethereum startup ConsenSys, to enable the linkage of rural banks to Union Bank. The blockchain platform allows enterprises to implement blockchain in a more accessible way while still maintain levels of robustness, security, and performance.
Rural banks in the Philippines serviced the financial needs of people living in remote areas. Their business processes are very manual and paper-based as requirements to be part of BancNet, Philippine Clearing House Corporation and SWIFT are too complex.
By using the Kaleido blockchain platform, rural banks will be able to do real-time funds transfers between banks, domestic and international. The banks and the customers can also have access to universal banking products and share their own services on the platform. Project i2i is currently being rolled out with seven rural banks, including Cantilan Bank, one of the country’s largest community banks.
Tanya Hotchkiss, executive vice-president of Cantilan Bank, said that a regular interbank transaction with their bank would take one day to a month to be completed because the transaction would’ve to undergo 25 different processes handled by five departments. She said through the use of blockchain technology they were able to make their processes more efficient.
Justo Ortiz, chairman of the Board for UnionBank, said that they intend to connect with the dwindling number of rural banks in the country. It is estimated that 400 rural banks with around 2,000 branches are operating in the Philippines.
“Rural banks are critical as they are embedded in remote communities,” said Ortiz, citing the importance of helping these banks scale up as they would eventually spur rural development. “With blockchain we may have cracked the code for inclusive progress,” he concluded.