“Agent/Agency Banking ”

For
United Coconut Planters Bank

Study
Presented to the Faculty of the

Graduate School
Master in Information System
Asia Pacific College
Makati City

In Partial Fulfillment
Of the Requirements of
CAPSTONE 1

By:
Sarah Cielo R. Cuisia

Dr. Lorena W. Rabago

Mentor

May 2019
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

Table of Contents
Business Requirements ............................................................................................................................... 1
A. Company Profile ................................................................................................................................ 4
1. Vision and Mission ...................................................................................................................... 4
2. Business Processes ...................................................................................................................... 5
3. Products and Services ................................................................................................................. 9
4. Organization Chart .................................................................................................................... 11
5. Clients and Partners .................................................................................................................. 12
B. Business Analysis ............................................................................................................................. 13
1. Opportunity and Business Challenges ....................................................................................... 13
2. Problem Pyramid ....................................................................................................................... 13

Digital Maturity Model............................................................................................................................... 14

A. Digital Transformation.......................................................................................................................... 14
B. Maturity Model .................................................................................................................................... 14
C. Respondents ......................................................................................................................................... 15
D. Digital Maturity Distribution Scores ..................................................................................................... 15
E. Data Analysis ........................................................................................................................................ 16
F. Summary............................................................................................................................................... 22
G. Appendices ........................................................................................................................................... 23

2
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1. Introduction
The UCPB 188-branch network nationwide is a major driving force in our growth. They were
formulating the Bank’s rehabilitation plan 14 years ago, noted that they had a 178-branch network that
was largely under-utilized because of our focus on corporate accounts. UCPB is well positioned to
provide the financial services they need. They bring to the table the unique competitive edge. : a level of
customer relationship that is second to none. In fact, an independent market scan reveals that what we
have is exactly what consumers and middle market firms want: ready access, quick turnaround , and
proactive and personalized service. They plan to stay firmly entrenched in these markets and ride
tremendous benefits of their sustained growth. The exposure to the corporate market, however will
remain just as strong , as shown in the 15% growth in the corporate loans in 2017 and flourishing
relationships with this segment. Through the UCPB-CIIF Finance Development Corporation, they
provide the financing to farmers mainly coconut farmers, among the poorest in the agricultural sector – so
they can undertake alternative livelihood activities to augment their meager income. In 2017, UCPB CIIF
Finance released a total of P602 million in new loans to 10,499 farmers in 30 coconut provinces.
Established in 1994, UCPB CIIF Finance aims to deliver financing support to farmers who usually
have difficulty accessing credit from formal lending institutions. As these small farmers turn into
entrepreneurs, they develop credit discipline , are able to access less expensive credit from the other
sources, and grow. Since 1995 when it launched its first lending program , UCPB CIIF Finance has
pumped over P9 billion in loans to 66 coconut provinces , benefitting 436, 067 farm households.

Statement of the Problem

According to a report by The World Bank, an estimated 2 billion adults worldwide don’t have
a basic account. Governments across the world are focusing on expediting financial inclusion to
eradicate poverty and provide economic stability to all. However, 59% of unbanked adults cite
unavailability of affordable banking services as the key reason for not having an account. Lack of
banking services in rural areas or a tiresome documentation/onboarding processes are some other
notable roadblocks. The target market of this study, is not just for coconut farmers- but also for Low-
income households, small and micro businesses, Rural and remote households, Customer
transitioning from informal to formal status.

Agency banking refers to the provision of banking services by a third party to customers on behalf of
a licensed and prudentially regulated financial institution such as bank or other deposit taking
institutions. To bring the concept of agent banking as an initiative of financial deepening into
perspective , definitions of the following terms is imperative: financial deepening, financial inclusion
and financial system.

Objective: UCPB will be able to expand their customer base by onboarding new customers that
were previously out of reach. By having bank agents instead of physical bank branches, the cost of
infrastructure and manpower are reduced while revenue are increased. Financial inclusion is an effort
to bring all people regardless of their income level into a formal economy . It is important that no
person; however poor , remains excluded from their ecosystem.

3
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1. Business Requirements

1.1. Company Profile

UCPB is a leading provider of financial products and services to corporations, private and
government institutions, middle market companies, small – and medium-sized businesses and
individuals in the Philippines. Today, the Bank and its subsidiaries operate nationwide delivering a full
range of expanded commercial banking services to a highly diversified clientele. It has strong
capabilities in consumer finance, commercial credit, corporate and investment banking, trust banking,
domestic and international trade finance, treasury and money market investment, cash management
and deposit services. UCPB has always been at the forefront of customer service innovations. It was
among the first banks to introduce an ATM service in the late 1980s. It has since expanded its
electronic banking capability with internet banking and mobile banking facilities. UCPB is a key
player in countryside development as well. UCPB-CIIF Finance and Development Corp. and UCPB-
CIIF Foundation, UCPB’s development arms, implement various credit programs and community-
building activities in the country’s 64 coconut provinces to uplift the quality of life of people living in
coconut communities. Since 1995, the UCPB-CIIF Finance Development Corp. has released over P9.3
billion in loans to coconut farmers and their wives, and has also provided numerous trainings to them.
The UCPB-CIIF Foundation, on the other hand, has given scholarship grants to over 3,000 children of
coconut farmers to help alleviate their status in life.

1.2. Vision and Mission

Vision

 To be the bank of choice of the middle and consumer markets by providing

personal and proactive service and innovative products.
Mission

 We will continue to provide personal and proactive service that effectively

responds to the diverse and dynamic needs our clients.
 We will continually enhance the customer experience through efficient and
convenient service delivery.
 We will continue to provide relevant, innovative and value-adding products and
services.
 We will maintain and promote a culture of professionalism, integrity and
excellence and social responsibility among our employees.
 We will consistently produce superior financial returns for our stakeholders.

4
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1.3. Business Processes

1.3.1. Deposit – Acceptance of Cash Deposit

 Recover cash and covering deposit slip from the client or

representative
 If client requires duplicate / additional copies of the covering deposit
slips, Request client or representative to prepare additional copies
 Compare the duplicate/ additional copies of deposit slips with the
original copy to ensure that the details are the same
 Mark all duplicate / additional copies with the “DUPLICATE” stamp

 If clients doesn’t require duplicate/ additional copies of the covering

deposit slips, Examine deposit slips for illegible or discrepant item
(as to date, account name, account number etc.)
 If in order request, request Client or Representative not to leave the
counter to witness the count and verification of cash.
 If not order, request Client or Representative to alter all the copies of
the deposit slips and sign in full the alteration thereof.

 Count cash received and verify correctness against the deposit slip.
1. Compute for the extension totals and encircle/ tick mark the
amount for every correct item
2. Verify the total appearing on the deposit slip
 Place counted cash immediately inside respective bins in the cash
drawer

 Validate deposit slips in the Branch Delivery System (BDS)

 If the BDS is online
o Detach client’s copy of the deposit slip
o Release Client’s copy of the deposit slip / additional
copies of the deposit slip to the Client/ Representative
 If the Tellering System is offline
o Advise the client or representative of the offline condition
o Request the client or representative to prepare duplicate/
additional copies of the deposit slip, is needed.
o Mark all copies of the deposit slips with the “OFFLINE”
stamp. Indicate the time of deposit receipt on the
“Offline” stamp
o Release client’s copy of the deposit slip/ additional copies
of the deposit slips to the Client or representative
o Set aside the original copy of the deposit slips received
during Offline condition and validate transaction when the
BSD becomes online.

 Set aside Bank’s copy of deposit slip for callback, end of day
balancing and recordkeeping

5
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1.3.1.1. Deposit- Acceptance of Cash Deposit under “ Subject to Count” Condition

 Explain the “SUBJECT the Count” conditions to the Client prior to

acceptance of deposits
 Receive cash and covering deposit slips the client
 Compare the duplicate / additional copies of deposit slips with the
original copy to ensure that the details are the same
 Mark all duplicate / additional copies of the deposit slips with
“Duplicate “ stamp

 Examine deposit slips for illegible or discrepant item (as to date,

account name, account number etc)
o If in order, mark the reverse side all copies of the
covering deposit slips with “Subject to Count” Stamp.
o If not in order, request Client to alter all copies of the
deposit slips and sign in full the alteration thereof.
 Request Client/ Representative to sign the “ Subject to Count” Stamp
marked on the reverse side of the deposit slips.
 Forward the signed deposit slips with the Letter of Authority (if
Signed (if signed by the representative) to the Senior Teller (ST) for
signature verification

 Stamp “Signature verified” beside the signature/s of the Client in the

“Subject to Count” Stamp or beside the signature /s of the Client in
the Letter of Authority ( if signed by representative and affix by
initial)
 Forward the deposit slip with Letter of Authority (if signed by the
Representative ) to SA branch for the acceptance of cash deposit

6
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1.3.2. Withdrawal

 Receive the passbook and withdrawal slip from the Client

 Examine the passbook and Withdrawal slip.
1. Check that the “Signature of the Depositor” portion of the
withdrawal slip is signed by the Clients
2. Check the account name and number if the same
3. Check the date is current , amount in words and figures tally.
4. Check that any alteration , if any is signed in full by the Client/s

 Encode the details of the withdrawal in the Branch Delivery System

(BDS), the specimen signature of the client will automatically appear
in BDS.

 Compare the signature appearing on the “ Signature of the

Depositor” portion of the withdrawal slip against the specimen on
the Signature Verification System (SVS) of the BDS. Determine the
required combinations . If any, (if SVS is down).

 If withdraw at cash in limit, Affix initial on the “Verified by” portion

of the withdrawal slip. Validate the withdrawal slip and update
passbook.
 If not, Affix initial on the “Verified by” portion of the withdrawal
slip.
 Check the accuracy and override transaction.
 Affix on the “ Approved By” portion of the withdrawal slip.

 Process the payment.

o Count cash
o Indicate the cash leakdown on the space down provided on
the withdrawal slip
 Request the Client to acknowledge receipt of the cash.
o Request the client to sign on the “Payments Received by”
portion of the withdrawal slip
o If “ the Payment received by “ position of the withdrawal
slip is already pre-signed upon presentment, request Client
to sign again below the pre-signed signature on the
“Payments Received” by portion of the withdrawal slip.
o Compare the signatures in the Payments / Received by and
on the signature of the depositor positions on the
withdrawal slip

 Count the cash in front of the client

 Release the cash and return the updated passbook and Client’s copy
of the withdrawal slip to the Client.
 Stamp “PAID” on the face of the withdrawal slip .
 Set aside the paid validated withdrawal slip for callback end of day
balancing and record keeping.

7
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1.3.3. Loans

8
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1.1. Products & Services

Deposits
Multi One
ATM Peso Savings Account
Peso Accounts Passbook Peso Savings Account
Regular Checking Account
Kiddie Max Savings Account
Pension Accounts
US Dollar Savings Account
Euro Savings Account
Foreign Currency Accounts Japanese Yen Savings Account
British Pound Savings Account
Australian Dollar Savings Accounts
Peso Time Deposits
Time Deposits High Yielder
US Dollar Time Deposit
Remittance Service
U-Remit ATM Savings Account
U-Remit Passbook Savings Account
U Remit Accounts U-Remit Peso Checking Account
U-Remit US Dollar Savings Account
U-Remit System(Online Remittance System)
Direct Credit To UCPB Accounts
Inward Remittances through Tie-Ups and Direct Credit to Local Bank Accounts
Correspondent Banks Cash Pick up Over UCPB branches
Payout Center for: uniteller, ExRemit, Cash
Express, AFTAB, Maybank, Iremit, Transfast,
NewYork Bay Philippines
Cash Management
Bills Payment
-Over the Counter Collection Facility
-Electronic Channels
-Automatic Debt Arrangement
Point of Sales Collection Service
Internet Payment Gateway
Collections
Internet Payment Gateway
Post Dated Check Warehousing Online
Facility
Corporate Collection Service
Deposit Pick-Up/Cash Delivery Service
Night Depository Service
National Government Collections
Disbursements Checkwriter.Biz (Online Check Disbursement
Facility)
-McWriter
-Corporate Checkwriter
Payroll Facilities
UCPB eMoney Card
BIR eFPS
Automatic Transfer Management

9
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

Sweep Facility
Account Management Customized Statement of a Account
UCPB CM. biz (Corporate Internet
Banking)
UCPB Connect (Retail Internet Banking)
UCPB Mobile Phone Banking Service
electronic Banking Facilities (iOS, Android and Java App)
UCPB Telebanking
UCPB Automated Teller Machines
- On-site and Off-site Deployment
- Mobile ATM Service
BIR
Government Payments SSS
PhilHealth
Bureau of Customs
Conduit Clearing Arrangement with
Online Facility (CCA.Biz)
Special Services Depository and Custodianship Service
SSS Pension Crediting
SSS Sickness and Maternity Benefits
Payment Thru the Bank
Direct Deposit for US Pensioners
Consumer Loans
Auto Loans Brand New, Second Hand, Refinancing,
Fleet Financing
Home Loans Condominiums, Townhouses, Houses
and Lots
Refinancing, Construction/Renovation,
Multi-Purpose Loans
Personal Loans Your Easy Salary Loan (YES Loans)
Salary Loans (Corporate Arrangements)
Small Business Loans Term Loan
• Promissory Note (PN) Line
• Franchise Loan
• Domestic Standby Letter of Credit

10
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1.2. Organizational Chart

Board Committee
The Board also functions through committees that handle specific responsibilities.
Assisting the Board in its governance tasks are the following committees: (Corporate
Governance, Audit, Risk Oversight, Related Party Transactions, Treasury Oversight, Anti
Money Laundering Oversight).

Executive Committee
The Executive Committee assists in the general supervision, administration and
management of the Bank. It is composed of four members of the Board of the Directions,
including President and CEO.

Audit Committee
The Audit Committees oversees that the auditing accounting, financial management
principles and practices are in line with International and Philippines best practices and
conforms to legislative and regulatory requirements.

Trust Committee
The Committee manages the Bank’s Trust and fiduciary activities. It reviews and
approves transactions between trust and/or fiduciary accounts, the investment,
reinvestment and disposition of funds or property; offering of new products and services.

Board of Directors

Office of the Corporate

Secretary

Trust Committee Audit Committee Risk Management Executive Committee

Committee

President & CEO

Trust Banking Group Internal Audit Division Risk Management Division

UCPB Securities Inc. UCPB Savings Bank UCPB Leasing and Finance
Corporation

Branch Banking Group Corporate & Consumer Treasuring Banking Group Operations Group
Banking Group

11
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

Corporate Anti-Money Related Party Compensation & Coconut Farmers Legal Oversight
Governance Laundering Transactions Remuneration Project Committee
Committee Oversight Committee Committee Development
Committe Committee
Bank Compliance Division

Corporate Services Conglomerate Security

Division

Support Services Human Resources Legal Services Group Information Technology & Marketing Group
Group Group Methods Group

1.3. Clients & Partners

UCPB Savings Bank

UCPB Leasing & Finance Corporation
UCPB Securities Inc.

UCPB General Insurance Co

United Coconut Planters Life Assurance Corporation (COCOLIFE)
COCOPLANS Inc.
UCPB CIIF Foundation Inc. (COCOFoundation)

1.4. Business Analysis

1.4.1. Opportunity and Business Challenges

1.4.1.1. Opportunities
 11.8B growth in UCPB’s Deposits in 2017. The collective efforts of the
Branch Associates led to the growth of the deposit base by P4.7% to 264.6B
Low-cost current and savings account.
 Total deposits increased by P13.3B to P278.9B from P265.6B in 2016, as they
expanded to customer base and introduced product enhancements. Demand
deposits grew by 14.1% to P48.8B while time deposits rose by 21% to
P79.9B.
 Loans and receivables rose by 13.2% to P170.3B year on year, with corporate
and consumer lending posting double digit growth. Aligned with the focus on
expanding middle market and consumer lending operations, they continue to
increase sales forces to address the growing demand for the Bank’s loan
products.

12
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

1.4.1.2. Challenges
 IT risks and Information security issues, have become progressively
more complex and pressing in years. The aspect of digital transformation
are changing enterprise IT, enabling greater business agility, but also
creating a new set of cybersecurity challenges.

 Liquidity Risks- is the ability of the Bank to fund increases in assets and
meet obligations as they become due without incurring unacceptable
losses. The Bank closely monitors the current and prospective maturity
structure of its resources and liabilities and the market condition.

1.4.2. Problem Pyramid

1. The lack of an effective and

efficient corporate governance in
the sector
2. The unbanked , has never had a
bank account

1. Reaching remote areas 1. Long distance that people needed to

2. Banking the poor travel to access financial services
3. Financial literacy improving 2. Managing Liquidity
4. Harnessing technology in rural 3. Expensive for financial institutions
areas since transaction numbers and
volumes do not cover the cost of a
1. Third parties ( Agent banking branch 1. expand financial access to low
service provider) income households on fair and
2. Setup Agent Banking Network This will be show in Capstone 2 equitable terms.
3. Mobile Agent Banking / Agent 2. Provide financial services through
Banking Solution nonbank agents (to operate as
satellite branches)

13
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

2. Digital Maturity Model

2.1. Digital Transformation

Digital Transformation is the process of adapting existing business practices to new

digital methods to increase efficiency and keep up with rapidly-changing market demands.
Digital Banking is more than getting consumers to use or online or mobile banking or building a
new app- it is a way to run an entire organization . This new model touches product
development, distribution, front and back office operations, marketing communication and the
entire customer experience.

It is time for UCPB to place a high priority on the development of a digitization strategy,
leveraging the benefits of brand recognition, a strong multi channel distribution network (omni
channel), unequalled customer insights operational security, trust & infrastructure to provide
human touch.

2.2. Maturity Model

Based on the assumption of predictable improvement and patterns of good practice ,

maturity models basically represent theories about how organizational capabilities evolve in a
stage by stage manner along an anticipated desired or logical maturation path. This is why
maturity models are also termed stages of growth models, stage models, or stage theories.

With maturity models representing theories of stage base evolution , their basic purpose
consists in describing stages and maturation paths. Typically the following are the main
application – specific purpose of use:

 Descriptive: A maturity model serves a descriptive purpose of use if it is applied

for “as is” assessments where the current capabilities of the dimension under
investigation are assessed with respect given criteria.

 Prescriptive: A maturity model serves a prescriptive purpose of use if it

indicates how to identify desirable maturity levels and provides guidelines on
improvement measures.

 Comparative: A maturity model serves a comparative purpose of use if it allows

for internal and external benchmarking among organization.

 Holistic: A maturity model serves a holistic purpose if it integrates the

descriptive, prescriptive and comparative purpose of use into a single
improvement framework

14
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

Respondents

Jaime Lambino
Assistant Vice President of Consulting Development System Department
25 years in UCPB

Loida Cordero
Department Head of Budget
21 years in UCPB

Arnie Mateo
Lead Software Test Engineer
4 years in UCPB

Jaime
Governance and Leadership 1.5
People and Culture 2
Capacity and Capability 3
Innovation 3
Technology 5
2.9

Arnie
Governance and Leadership 1.5
People and Culture 2
Capacity and Capability 2.5
Innovation 1.5
Technology 1
1.7

Loida
Governance and Leadership 1
People and Culture 1
Capacity and Capability 2
Innovation 1.5
Technology 1
1.3

15
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

Digital Maturity Scores

Distribution of Digital Maturity Scores

Software Development Software Testing Finance & Accountig

0
Governance and People and Culture Capacity and Innovation Technology
Leadership Capability

1. Governance & Leadership

Total Rating: 1.33
 Level 5 Transformed
a. Focusing on Core
o UCPB look for a government approved alternative to suspended recapitalization
program, they remained focused as ever on multi-pronged strategy: ensuring a stable
pipeline of products and services that meet the customer’s financial needs, being well
positioned for stronger market demand as the company expands , ensuring long term
growth potential, adhering to good governance principles and practices, ensuring
strong shareholder support and empowering communities.

 Level 4 Customer Driven

o At UCPB, corporate governance is considered vital component of sound strategic
management sustaining growth and stability and success. The Bank continues to
inculcate a culture of good governance throughout the organization , sustain the
highest standards of ethical conduct at all times, and uphold the principles of
transparency , accountability and fairness in all its business and its all relationship.

16
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

The Circular BSP 808 of Bank Sentral of the Philippines is the main guidelines and
information , Technology , Risk Management of the all banks. Circular 808 provides
guidelines and standards to ensure that banks implement security controls to adequately
protect their information asset from unauthorized access and deliberate misuse of
fraudulent modification, insertion, deletion or substitution.

The BSP is set to modernize the internal processes through adoption of next generation
systems and technology enabled solutions, with this the IT Risk Management Framework
will be upgraded

2. People & Culture

 Total Rating: 1.67
 Level 4 –Customer Driven
a. The Bank sustains a culture of excellence by developing next-in-line leaders to be
competent in assuming senior management position. Through the Talent pipeline
Management program, it ensures an adequate talent bench to fill in critical leadership
positions.

b. The bank shall develop a strong “ control culture” and promote a culture of risk
awareness and not risk aversion based on the framework recommended by the Bankers
Association of the Philippines (BAP).

c. Digital transformation will also enable us to better compete with our peer banks. The
critical component of this initiative is to be able to implement significant changes in our
overall strategy and culture to champion customer centricity , provide an omni channel
customer experience, enable data driven decisions using analytics, and attain platform
scalability through cloud computing. To succeed in this digital journey, we must instill a
culture of innovation in the organization.

3. Capacity and Capability

 Total Rating: 2.5
 Level 3 Transitional
 Human Resources: Investing to their People
 Staff Productivity gains and benefits from embracing digital solutions are
identified and sought.
1. Learning and development are fundamental to their growth strategy.
They invest in development opportunities that promote continuous
learning as a way of life. They provide holistic approach to development.
They Training for both hard and soft skills. They promote employee
welfare by providing employee programs that showcase the strengths of
people such as in the area of the sports. Likewise, they take pride that
they grow talent from within. In all these, they highlight the importance
of working together as one team to deliver the Bank’s objectives.

17
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

2. They continued to offer the mandatory, technical and leadership training

programs of the Bank. This includes the Management Development
Program which produces quality officers that helps strengthen their talent
bench.

 Internal Audit Strengthening the organization

 Digital policies and procedures regularly audited and improved.
1. IAD conducted assurance review based on the results of risk assessment and
the Banks’s objectives and targets. Likewise, IAD performed consulting
activities such as reviews as to controls to proposed policy guidelines,
conduct lectures and participation in an advisory capacity on automation
project committees.
2. The Audit Committee, giving emphasis to regulatory compliance
governance , risk management , business operations, and human resources,
discussed 249 various internal audit reports covering the following, among
others:
a. Know Your Client (KYC)/ Anti Money Laundering ACT (AMLA)
b. IT processes, systems and information security
c. Risk management tools and processes;
d. Credit processes;
e. Treasury and Trust processes and
f. Certain accounts and transactions considering their risk impact to the
Bank.

4. Innovation
 Total Rating: 2
 Level 3 Transitional
a. UCPB has also been among the first local banks to invade the customer service
innovation space when it introduced the ATM service in the late of 1980s . It has since
established multi- channel service deliver network that now includes telephone banking,
internet banking and mobile banking facilities, in addition to its 231 branches and 340
ATM nationwide

b. At UCPB, it is their mission to provide personal and proactive service that effectively
responds to the diverse and dynamic needs of the clients. This is true whether they are
offering customers a better way to bank delivering long-term value of shareholders ,
advancing our employees development or investing in local communities.

c. They make sure they effectively execute strategies that are steady and consistent, and yet
agile and responsive to new opportunities and challenges. They provide financial
solutions that cater to the local needs, and deliver them with deep commitments to
customer service excellence. They offer innovations while keeping tried and tested values

18
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

and traditions. They strive for dynamic growth while adopting sound and prudent risk
management practices.

5. Technology
 Total Rating: 2.3
a. Growing and Going the Extra Mile
i. UCPB sees this as an opportunity to build deeper and more personal relationships
with those they serve. They also strive to enhance the way they run their
business, harness technology, and empower our associates. The future of banking
remains full of promise and potential. They are gearing up to respond to the
change and reach even greater heights.
b. The banking industry is facing a dramatic transformation, driven by the rapidly evolving
customer behavior, the emergence of digital technology, and increasing regulations and
competitions.
c. To ensure the they meet the needs of their customers and growing organization, the
Information Technology and Methods Group (ITMG) continually enhances the internal
processes using the latest IT solutions to create a better customer experience.
d. Information technology risks and information security issues have become progressively
more complex and pressing in years. The trend in cyber attacks, intrusions and other
incidents on computer systems not only persist, but it will continue to increase in
frequency and spread in magnitude. To ensure the Bank is consistent to the Information
Security Management System (ISMS) principles regular review of various technology
and information security relation policies, guidelines and procedures is conducted.
i. In 2017, the revision and approval of various information security -related
policies, guidelines, and procedures covering the following domains:

1. Information Security Incident Management

2. Information Systems Lifecycle
3. Access Control
4. Change Management
5. Communication and Operations
6. Information Asset Management
7. Information System Lifecycle
8. Human Resource Security
9. Physical Security
10. User Access Management
e. The Information Technology Methods Group (ITMG) transformed the system into a
hyper-converged infrastructure with the implementation of cloud computing solutions,
among others. They also enhance the availability of the core banking system using
MIMIX technology and installed a new trust banking system.
f. UCPB was among the first banks in the local industry to complete its migration to the
EMV chip technology. All UCPB ATMs, ATM cards and POS terminals are now EMV
compliant. They also fully implemented the Check Image Clearing System (CICS). This

19
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

initiatives enhances customer experience by reducing the clearing time for cheques from
three days to one day and making funds available at 10am the next banking day.
g. They rolled out a Client Information Management System (CIMS) for corporate clients.
This helped to enhance the Know Your Customer (KYC) capabilities by enabling the
frontlines to have access to a single view of a wide range of client information.

Digital Strategy
 To explore the diversity and uniqueness of agent banking models practicing across
nationwide.

 What-Reaching the unbanked with Digital

 Attracting new customers and opening accounts for them using a mobile
application is not only the most convenient way from the customer’s
perspective, but it is also effective for banks.

 Agency banking is a model that helps improve financial outreach. Using

this business concept commercial banks can contract third party retail
networks as banking agents and these agents are then authorized to offer
selected products and services on behalf of the bank. This will provide
the opportunity to access financial products and services at the location
nearest the customers , thus breaking down certain barriers to financial
inclusion such as cost and accessibility.

 Channel Distribution. Agency banking enables the banks to take

financial services to the doorsteps of the unbanked. It makes it possible
for banks to go to into places brick. Agency banking enables them to
externd their reach not only into areas with poor branch but also up to the
doorstep of those are reluctant , or otherwise unable to make a trip to the
nearest branch.

 Channel Innovation. Consumers adoption of multiple channels has

fueled their expectation of true multi-channel banking, which allows
them to transition seamlessly between touch points as they fulfill several,
or even a single transaction. Agency banking , an important channel
innovation that has improved banking penetration in underserved areas in
the past , can now help banks tap into other segments by becoming an
integrated component of multi-channel banking.

 Improve Mobile Banking. Consumers increasingly are selecting bank

and credit union providers based on their digital banking capabilities. It
is no longer enough to just provide account balances and a list of recent
transactions on a smartphone. Mobile Account Opening, Funds
Transfers, Bills Payment, Mobile Deposits.

20
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

 How
 Digital Transformation
 The use of digital marketing and customer service strategies to acquire,
retain and service customers, adapting to the digital consumer but also
promoting digital services to reduce costs, both in services and marketing
spend.

 Customer Service
 USS Team or User Support of UCPB will be distributed to different
multi channel services of the bank.
 Target Audiences:
 Rural families having one member working in different cities.
 Rural families having one member working in abroad.
 Rural families having one member studying in city.
 Farmers who buys fertilizer and seeds in distant market.
 Farmers who normally do contract farming.
 Rural families who receives funds from different national and
international NGOs.
 Workers who participates of food program in Philippines
Government.

 Innovation
 Electronic Money and Mobile Banking: Technological Innovations in
Service Delivery The use of information and communication technology
in delivering financial services holds the promise of reaching new
markets that conventional infrastructures (i.e., brick and mortar bank
offices) are unable to service. One such technological application is the
use of mobile phones as channels to access financial services or what
some have defined as branchless banking.
 Designing New Security Architecture for Online Banking.
 Capability and Change Management
 Agents to comply with relevant legislation including secrecy provision
 Agent contract, monitoring & supervision mechanism
 Banko Sentral ng Pilipinas will be part of approval & assessment of
specific agents or third party.
 IAD or Internal Audit will be part of Quarterly audit
 Additional or Extend IT Risk Management Framework

 Governance CIRCULAR No. 940

 BSP Issues Regulation Enabling Banks to Expand Service Delivery
Channels. In line with the thrust of the Bangko Sentral ng Pilipinas to

21
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

create an enabling regulatory environment for innovations and allow

banks to exponentially expand reach and serve clients more efficiently,
the Monetary Board recently approved the guidelines for new bank
service channels and relaxed existing regulations on deposit taking
activities outside bank premises.
 Under the new regulations, banks are now allowed, with prior BSP
authorization, to serve clients through cash agents contracted by banks to
accept and disburse cash in its behalf, facilitating online self-service
deposits, withdrawals and fund transfers, as well as bills payment. Cash
agents can also perform Know-Your-Customer procedures as well as
collect and forward application documents for loan and account
opening. They may also sell and service insurance as may be authorized
by the Insurance Commission. These cash agents are typically cash rich
third party entities with many outlets that conduct regular business in
fixed locations anywhere in the country, such as convenience stores,
pharmacies and other highly accessible retail outlets.
 Cash agents enable banks to leverage on innovative digital solutions to
serve a wider client base, particularly in the low-income and rural areas
where there is limited commercial incentive to establish a full branch or
even a micro-banking office (MBO).
 The BSP will evaluate the quality and sufficiency of these risk
management and control systems before granting authorization to
perform banking services outside bank premises.

 Enabling Technologies through OPEN API Ecosystem

 Open standard protocols for authorization such as OAuth and OpenID
Connect are current best practice for granting third-party access to
account information while maintaining the privacy of the customer’s
login credentials. Re-authentication is also required depending on the
activity being invoked such as funds transfer or payment.

Summary
 Banks in the Philippines have all the necessary tools and a supportive
regulatory environment to lead the country into a new era of digital banking.
To start this jounrye and to exploit the opportunities, banks have to focus on
and invest in their digital strategy , which should involve not only
technology, but also process and organization reengineering. This is a
holistic approach and while there are risk factors , the truth is that the change
is inevitable whether or not banks are ready.

22
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

Appendices

23
 ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

References

Name Link/Document
UCPB Annual Report 2015 www.ucpb.com
UCPB Annual Report 2017 www.ucpb.com
Role of Banking Services https://www.academia.edu/11300905/Role_of_
Agent_Banking_Services_in_Promotion_of_Finan
cial_Inclusion_Inclusion_in_Nyeri_Town_Kenya
Benefits of Agency Banking https://medium.com/crowdforce-series/4-major-
benefits-of-agency-banking-89aec8b15110
Factors influencing adoption of agent http://erepo.usiu.ac.ke/bitstream/handle/11732
banking in Kenya /2827/ELIZABETH%20MUNGAI%20MBA%202016.
pdf?sequence=2&isAllowed=y

24
ASIA PACIFIC COLLEGE School of Computer Science and Information
Technology
3 Humabon Place, Magallanes, Makati City 1232 PH Master in Information Systems (MIS)
CAPSTONE 1

25