BRANCH BANKING | Staff Reporter, Philippines

The ARK: UnionBank's take on the future of branch banking

A branch with no bank tellers, no long lines, and completely paperless, The ARK pushes the frontiers of digitalising the country’s banking industry.

When Union Bank of the Philippines launched its first fully digital branch called The ARK in September 2017, the goal, according to the bank’s chief user experience officer Ana Delgado, was to showcase and introduce to their customers, and to the rest of the banking industry in the Philippines, what the future of branch banking in the country can and may look like: fully digital, customer-friendly, and convenient.

“The ARK is the first of its kind demonstrating a transformation of space, people, and processes to deliver a suite of digital experiences, products, and transactions,” said Delgado, adding that the launch, in one way or another, pushes the frontiers of the banking industry in the country, which is often characterised by a slow acceptance and implementation of digital transformation and innovation.

These bold ambitions and proclamations have served as a breath of fresh air from the typical experience Filipinos have when they visit bank branches and carry out their transactions. Inside the Philippines’ first fully digital bank branch, customers do not have to wait in long lines. They do not have to secure slips of paper with queue numbers from a machine or handed out by a bank staff, and wait for their turn on the cue of an overhead digital signboard. In The ARK, customers also do not need to fill out papers for specific transactions and, most of all, there are no bank tellers.

Everything is done and carried out through self-service machines or tablets. In The ARK, customers are greeted with comfortable, bright-coloured couches, free-flowing refreshments, and a host of technologies and gadgets for banking transactions, including standalone terminals, tablets, touch screen TVs, and virtual reality goggles.

Despite having no bank tellers, The ARK still houses bank staff ready to offer customers advice and guidance on financial tools, opportunities, and other services that UnionBank has at their disposal. Located in the country’s busiest business district, Makati, where many people juggle time between work and squeezing in banking errands, the digital bank branch was conceptualised to address existing bottlenecks in branch banking in the Philippines: lack of technological integration and inconvenience.

However, The ARK is much more than just a revolutionised bank branch where people do banking transactions using new technology. “The ARK is not just a branch. It is also a community space and venue that will host exchanges in thought leadership amongst our teams and our clients,” said Delgado. “Aligned with this purpose, The ARK will host regular events to bring different members of the community together to learn, share ideas, and make connections.”

Setting sail
Launched less than a year from when it was conceptualised by a team of internal finance experts and leading designers from around the world, according to Delgado, The ARK was largely based on five concepts: space transformation, people transformation, process transformation, 24/7 machines transformation, and customer experience transformation.

For the space transformation, The ARK provides a “third space” where customers can have coffee or log in to the internet to get whilst doing their banking transactions. “UnionBank has designed The ARK to become a destination before and after work, providing room for offsite productivity and encourage creative tech ideas not just from its partners, but also its customers,” Delgado said.

In terms of people transformation, The ARK encourages bank staff to be beyond just bank tellers or financial advisers. They are called Ambassadors who will lead to educate and drive customers towards the digital space in financial services.

For process transformation, The ARK is at the forefront of digital branch banking in the Philippines, digitising all branch transactions for customers including product application. This includes the novelty of customers able to fill out their transactions via a tablet provided in the space and route these to the ambassadors straight through, with customers receiving digital transactions receipts via email or SMS. “Turn-around time to process transactions, in turn, was reduced especially in account opening from average of one hour to average of 15 minutes,” Delgado noted.

In terms of round-the-clock machines transformation, The ARK launched four new machines including a Virtual Teller Machine, the first in the Philippines, which provides virtual customer service, cash deposit, and cash withdrawal. It will also include virtual account opening and card issuance, biometrics and QR code, cardless withdrawal, and passbook update down the road.

Other features launched also include a cash recycling machine where customers can do cash deposit and withdrawal and a teller cash recycler which replaces the need to have a bill counter, counterfeit detection machine, and cash trays. End-of-day balancing was reduced from 30 minutes to 10 minutes.

Lastly, and perhaps the most important, is the transformation of enhanced customer experience in branch banking. The ARK eliminates the eventual long lines and paper waste, whilst providing new innovations like augmented and virtual reality experiences for home and auto loan, screens instead of posters for marketing zones, tablets instead of paper for transaction zones, and SMS or email receipt instead of paper.

Other groundbreaking facilities provided by The ARK includes a real café experience with a barista, private zones equipped with screens for business class customers, as well as the ability to pre-order transactions through UnionBank Online.

Fuelling innovation
But how secure and safe is this innovation for customers who are starting to be receptive about moving entirely to digital banking and virtual financial transactions? “The ARK is the first bank in the Philippines to use cloud-based platform, Appian, for its transactions approved by the Bangko Sentral ng Pilipinas,” said Delgado. “Appian enabled the bank to rapidly develop automated processes and applications.”

To ensure the centrality of security and safety of its clients, particularly their confidence towards digital banking, UnionBank made sure that The ARK follows all the strict guidelines and standards for security. Currently, The ARK has more independent security certifications than any other BPM or low-code platform, including PCI-DSS, Cloud Security Alliance, Privacy Shield Framework, SOC3, and SOC2 certifications. Appian PaaS is powered by Amazon Web Services with best-in-class 99.99% mission-critical availability.

In one way or another, The ARK is UnionBank’s foray to introduce the future of banking to many Filipinos. “No doubt, the next generation is dictating changes upon the banking industry,” said president and CEO Edwin Bautista. “But we also don’t want to isolate clients that have been loyal to us for the past 35 years. We built The ARK so that nobody would get left behind. UnionBank pioneers this concept and paves the way for the new age of banking.”

Roughly 7 months after its launch, The ARK has been getting warm reception and rave reviews for the efforts to revolutionise how banking can be done in the country. For Delgado, The ARK was launched mainly to answer this burning question: what is and will be the role of the branch in the future?

“The ARK is the answer to this question, reaffirming that the bank branch is not going away but its role and purpose will shift from a space to simply process transactions to a venue for advisory conversations, digital channel onboarding, self-service banking, and interactive experiences,” she concluded. “We believe that we spearheaded branch transformation in the Philippines with customer experience as the focal point. As unconventional as it sounds, The ARK by UnionBank hopes to win over clientele that is very comfortable with digital technology but still prefers the warmth of face-to-face transactions.”

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