Union Bank and ETH Co-founder to fix financial inclusivity issue in Philippines

[avikz]

Union Bank - One of the Largest Banks in the Philippines recently joined hands with Ethereum co-founder Joseph Lubin to fix the hole in the financial inclusivity issue of Philippines.

The issue:
The banking system in Philippines can only be accessed by the high net worth citizens. The reason is the default balance requirement of minimum $2,000. Which made a large portion of the mass outside the reach of banking system and they are heavily dependent on the local remittance networks. In any major cities of Philippines, remittance outlets are seen in every corner of every street like street food stalls. However, local remittance industry lacks serious level of business and operational integrity due to the unregulated nature of their business.

The proposed solution:
Union Bank will use ETH blockchain to bring transparency, security, robustness, and efficiency in the local remittance business with the help of ConsenSys, who are a market leader in this segment. Union Bank believes that this technology might be able to drastically improve the current financial infrastructure and ecosystem of the Philippines while keeping the costs under control. Which may be beneficial for Banks to provide services to the lower income group citizens of Philippines. Along with Union Bank, five other rural banks of Philippines are also joining in this collaborative project.

The conclusion:
Blockchain improving lives around the world! Famous British writer Mr. Arthur C. Clarke once said,

"Every revolutionary idea seems to evoke three stages of reaction. They may be summed up by the phrases:
1- It's completely impossible.
2- It's possible, but it's not worth doing.
3- I said it was a good idea all along."

Blockchain is a revolution and we are just seeing the world slowly started acknowledging that!

News source: https://www.newsbtc.com/2018/05/27/one-largest-banks-philippines-implementing-ethereum-consensys/

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[audaciousbeing]

Union Bank - One of the Largest Banks in the Philippines recently joined hands with Ethereum co-founder Joseph Lubin to fix the hole in the financial inclusivity issue of Philippines.

The issue:
The banking system in Philippines can only be accessed by the high net worth citizens. The reason is the default balance requirement of minimum $2,000. Which made a large portion of the mass outside the reach of banking system and they are heavily dependent on the local remittance networks. In any major cities of Philippines, remittance outlets are seen in every corner of every street like street food stalls. However, local remittance industry lacks serious level of business and operational integrity due to the unregulated nature of their business.

A banking system that have shut out a large percentage of the population is a failed one. What they need is a complete overhauling of their entire banking system and this approach is just a cosmetic one. I can't even believe such archaic banking system still operates in that part of the world. There is nothing wrong in having bank accounts for the high net worth individuals but there should be several options for different category of people in the country. Over here, banks have gotten to a position of them coming to you not the other way round where banks would have agents go and collect money from the low income earners who are either too busy to go to the bank or too shy to go there and deposit for them and also withdraw if need be.

What I see here is a change the entire frameworks and leadership of the overseeing agency there but bringing in the effect of blockchain would make an impact but not effective if there is no change in that policy.

[jseverson]

The banking system in Philippines can only be accessed by the high net worth citizens. The reason is the default balance requirement of minimum $2,000.

This is completely and absurdly untrue. $2,000 is a fortune for a large majority of the Philippine populace and it would make zero business sense for banks to require such an amount for an account. Even if the article meant Php 2,000 (which is around $40), it would still be off-base:

https://www.thinkpesos.com/8-savings-account-with-low-initial-deposit-and-maintaining-balance/

According to that link, you can maintain a bank account for as low as $2, which is a whopping 1000x lower than what the article claims. Payroll accounts for company employees don't even have a maintaining balance, having been designed for people who live paycheck-to-paycheck of which there are a lot in the Philippines.

I'm all for financial inclusivity, and therefore think this project is at least worth looking at, but I'm against misinformation.

[NavI_027]

Union Bank - One of the Largest Banks in the Philippines recently joined hands with Ethereum co-founder Joseph Lubin to fix the hole in the financial inclusivity issue of Philippines.

So this means that Union bank will now use Eth as a form of payment? (Sorry for not being sure because the thoufh is not direct to the point.) Oh! That's a good news for us, I'm pretty sure will become interested into this making that bank as People's choice.

The issue:
The banking system in Philippines can only be accessed by the high net worth citizens. The reason is the default balance requirement of minimum $2,000. Which made a large portion of the mass outside the reach of banking system and they are heavily dependent on the local remittance networks. In any major cities of Philippines, remittance outlets are seen in every corner of every street like street food stalls. However, local remittance industry lacks serious level of business and operational integrity due to the unregulated nature of their business.

Yeah! That's true. Even me prefers remittance centers compare to having bank accounts because it's faster and less hassle to deal with. Anyway, I think remittance centers can also do what a bank can do in terms of reliability and security so saying that it has lack of operational integrity is a little bit harsh so ince it helps our fellow countrymen to easily remit and accept coins.   

[milewilda]

The banking system in Philippines can only be accessed by the high net worth citizens. The reason is the default balance requirement of minimum $2,000.

This is completely and absurdly untrue. $2,000 is a fortune for a large majority of the Philippine populace and it would make zero business sense for banks to require such an amount for an account. Even if the article meant Php 2,000 (which is around $40), it would still be off-base:

https://www.thinkpesos.com/8-savings-account-with-low-initial-deposit-and-maintaining-balance/

According to that link, you can maintain a bank account for as low as $2, which is a whopping 1000x lower than what the article claims. Payroll accounts for company employees don't even have a maintaining balance, having been designed for people who live paycheck-to-paycheck of which there are a lot in the Philippines.

I'm all for financial inclusivity, and therefore think this project is at least worth looking at, but I'm against misinformation.

This is really misleading yet opening an account doesnt really even required high amount deposit and as said you can even stored up as low as $2 then you are good to go and now the article proclaims different values which arent right at all. Union bank is one of the banks on PH but i dont see any problem with their service and also you can opt out on using other banks if you dont like them. Banking system do always have its flaws.

[creeps]

Union Bank - One of the Largest Banks in the Philippines recently joined hands with Ethereum co-founder Joseph Lubin to fix the hole in the financial inclusivity issue of Philippines.

The issue:
The banking system in Philippines can only be accessed by the high net worth citizens. The reason is the default balance requirement of minimum $2,000. Which made a large portion of the mass outside the reach of banking system and they are heavily dependent on the local remittance networks. In any major cities of Philippines, remittance outlets are seen in every corner of every street like street food stalls. However, local remittance industry lacks serious level of business and operational integrity due to the unregulated nature of their business.

$2K is not true, this might be typo or misunderstanding about peso and dollar. Actually, you can open a bank account for just $2 from other local banks which is better compare to Union Bank. Remittances is not a problem actually since a lot of remittance outlet around Philippines and its highly regulated by the BSP (Bangko Sentral ng Pilipinas). Well, this is a good move by the banks and hopefully government will support this but I think Philippines need more time to adopt this kind of technology.

[Kemarit]

Let's me just correction few points here:

1. Union bank is not one of the biggest banks in the Philippines, but I would say that they are quite in the top 10 in the country. As far as I know, they are the first one to integrate Paypal payment thru their cards. So most likely they are really looking for other technologies to incorporate on their business model.

2. Minimum balance requirement is not $2,000. More of like $40-$100 for starters.

With that said, I agree with @jseverson, the article is somewhat misleading but you gonna love how banks in the Philippines really involves themselves in crypto and are very friendly. Here is another news coming from Union Bank back in February about adopting blockchain.

http://news.abs-cbn.com/business/02/14/18/unionbank-embraces-tech-behind-bitcoin-in-digital-pivot

[jseverson]

So this means that Union bank will now use Eth as a form of payment? (Sorry for not being sure because the thoufh is not direct to the point.) Oh! That's a good news for us, I'm pretty sure will become interested into this making that bank as People's choice.

I'd say assuming that they'll accept ETH just because of this collaboration is jumping a few steps ahead. It wasn't explicitly stated in the article, but the cost comparison section leads me to believe they simply want to use blockchain technology to improve their services and cut down on overhead. You can't really rule it out in the distant future though. As crypto becomes more prominent, banks are more likely to embrace them. I simply don't see that happening anytime soon though.

[avikz]

Let's me just correction few points here:

1. Union bank is not one of the biggest banks in the Philippines, but I would say that they are quite in the top 10 in the country. As far as I know, they are the first one to integrate Paypal payment thru their cards. So most likely they are really looking for other technologies to incorporate on their business model.

2. Minimum balance requirement is not $2,000. More of like $40-$100 for starters.

With that said, I agree with @jseverson, the article is somewhat misleading but you gonna love how banks in the Philippines really involves themselves in crypto and are very friendly. Here is another news coming from Union Bank back in February about adopting blockchain.

http://news.abs-cbn.com/business/02/14/18/unionbank-embraces-tech-behind-bitcoin-in-digital-pivot

I am really not aware about the actual scenario of Philippines' banking industry. So when the article said the minimum balance required is $2,000, I gone ahead with the same understanding. So now my question is, if the banking system is accessible to everyone and a bank account can be opened with only $40, I don't see any reason for the remittance centers to exist.

In my country India, I can open a free bank account without any minimum balance requirement. So here I don't see a huge scope for remittance centers to operate. As a result we only have big corporate remittance companies like western Union, Moneygram and Paypal operating in India. They usually don't have much standalone shops set up for them, instead they operate within the Banks. They set up their small kiosk within a bank branch to facilitate the remittance.

So I believe you can understand the question here. If the banks are accessible to everyone and don't bring any financial burden to their citizens, why Philippines have a lot of remittance companies operating in this country. There must have a been a gap somewhere which I am trying to understand.   

[jseverson]

I am really not aware about the actual scenario of Philippines' banking industry. So when the article said the minimum balance required is $2,000, I gone ahead with the same understanding. So now my question is, if the banking system is accessible to everyone and a bank account can be opened with only $40, I don't see any reason for the remittance centers to exist.

In my country India, I can open a free bank account without any minimum balance requirement. So here I don't see a huge scope for remittance centers to operate. As a result we only have big corporate remittance companies like western Union, Moneygram and Paypal operating in India. They usually don't have much standalone shops set up for them, instead they operate within the Banks. They set up their small kiosk within a bank branch to facilitate the remittance.

So I believe you can understand the question here. If the banks are accessible to everyone and don't bring any financial burden to their citizens, why Philippines have a lot of remittance companies operating in this country. There must have a been a gap somewhere which I am trying to understand.   

Here is one article about the issue:

https://www.balikbayad.ph/blog/banks-vs-other-remittance-providers-which-is-better-in-money-transfer/

tldr; they offer better services in some cases, and while that is a knock on banks, it has nothing to do with financial inclusion or lack thereof (because most people do have access to an account). It also has nothing to do with banks imposing any kind of financial burden for citizens, as bolded out, because this is free market at work; remittance companies do small transfers better, and are thus the service of choice for most of the working class.

Bitcoin and other crypto would be a better choice if it weren't for their volatility, and it could even be argued that it's better regardless. That's more of a testament as to how revolutionary Bitcoin and crypto is though, rather than the narrative that banks are oppressive, because they're definitely not in this case.

[Theb]

I am also saying that this is not true, the 2,000$ (100,000₱) requirement is not true as from what I know it is just the minimum amount for your bank account to start earning interest (some banks even start at 50,000₱ or 1,000$), have a quick look at websites of well known Banks in the Philippines (BDO, BPI, MetroBank) and click at their Cash and Savings account section you will see that there are minimum deposits but not amounting to 2,000$. Seeing that the news article as well is not from the Philippines makes this news not so reliable. Banking system is not for the rich only here in the Philippines, a lot of people who have an average income has bank accounts and they are using it for payments and for other purposes.

[orions.belt19]

I am really not aware about the actual scenario of Philippines' banking industry. So when the article said the minimum balance required is $2,000, I gone ahead with the same understanding. So now my question is, if the banking system is accessible to everyone and a bank account can be opened with only $40, I don't see any reason for the remittance centers to exist.

In my country India, I can open a free bank account without any minimum balance requirement. So here I don't see a huge scope for remittance centers to operate. As a result we only have big corporate remittance companies like western Union, Moneygram and Paypal operating in India. They usually don't have much standalone shops set up for them, instead they operate within the Banks. They set up their small kiosk within a bank branch to facilitate the remittance.

So I believe you can understand the question here. If the banks are accessible to everyone and don't bring any financial burden to their citizens, why Philippines have a lot of remittance companies operating in this country. There must have a been a gap somewhere which I am trying to understand.   

Here is one article about the issue:

https://www.balikbayad.ph/blog/banks-vs-other-remittance-providers-which-is-better-in-money-transfer/

tldr; they offer better services in some cases, and while that is a knock on banks, it has nothing to do with financial inclusion or lack thereof (because most people do have access to an account). It also has nothing to do with banks imposing any kind of financial burden for citizens, as bolded out, because this is free market at work; remittance companies do small transfers better, and are thus the service of choice for most of the working class.

Bitcoin and other crypto would be a better choice if it weren't for their volatility, and it could even be argued that it's better regardless. That's more of a testament as to how revolutionary Bitcoin and crypto is though, rather than the narrative that banks are oppressive, because they're definitely not in this case.

Perhaps one other reason why most people choose to use remittances vs banks is because of its accessibility. Remittances may be found almost anywhere - from malls to almost any corner of a street. As compared to banks, remittances are more accessible especially for those who live in the provinces. Also, the fees are lower so people opt for the remittances especially since many make transfers from province to cities or overseas. It also does not have that much requirements as compared to opening up an account in a bank. The citizens choose it for the convenience.

[Kemarit]

Let's me just correction few points here:

1. Union bank is not one of the biggest banks in the Philippines, but I would say that they are quite in the top 10 in the country. As far as I know, they are the first one to integrate Paypal payment thru their cards. So most likely they are really looking for other technologies to incorporate on their business model.

2. Minimum balance requirement is not $2,000. More of like $40-$100 for starters.

With that said, I agree with @jseverson, the article is somewhat misleading but you gonna love how banks in the Philippines really involves themselves in crypto and are very friendly. Here is another news coming from Union Bank back in February about adopting blockchain.

http://news.abs-cbn.com/business/02/14/18/unionbank-embraces-tech-behind-bitcoin-in-digital-pivot

I am really not aware about the actual scenario of Philippines' banking industry. So when the article said the minimum balance required is $2,000, I gone ahead with the same understanding. So now my question is, if the banking system is accessible to everyone and a bank account can be opened with only $40, I don't see any reason for the remittance centers to exist.

In my country India, I can open a free bank account without any minimum balance requirement. So here I don't see a huge scope for remittance centers to operate. As a result we only have big corporate remittance companies like western Union, Moneygram and Paypal operating in India. They usually don't have much standalone shops set up for them, instead they operate within the Banks. They set up their small kiosk within a bank branch to facilitate the remittance.

So I believe you can understand the question here. If the banks are accessible to everyone and don't bring any financial burden to their citizens, why Philippines have a lot of remittance companies operating in this country. There must have a been a gap somewhere which I am trying to understand.   

Its because that ordinary Filipinos are more comfortable going to any remittance center close to them. Plus banks require a lot of documents now, even I can't make a bank account today. So I see that ordinary citizens will be intimidated to go to a bank talk to a bank manager or even a teller. And usually banks requires 3-5 business days before they clear your cheques, if somewhat sent you money from abroad. But with remittance center, its very quick in about 24 hours, families here can get the funds. That's why banks really needs to lower their requirement to attract potential customers so that $2000 dollars is not true. $2000 is like a high end salary here in a month in the Philippines so I doubt that anyone can just open up account if that is the requirements of Union Bank.