Aboitiz Group deepens innovation footprint

MANILA, Philippines — The Aboitiz Group is further deepening its innovation footprint in the Philippines and in the region to help the government, businesses, and communities leverage Data Science and Artificial Intelligence (DSAI) in responding to  interdependent challenges and exploring possibilities.

According to David Hardoon, chief executive officer of Aboitiz Data Innovation (ADI), the company is poised to help businesses and governments make well-informed decisions and build their own journeys through DSAI frameworks and solutions.

“By tackling key industry focuses, such as financial services, power, and smart cities, ADI showcases the possibilities DSAI can contribute to accelerate organizations’ business, environmental, social, and governance goals,” he said.

ADI consolidates DSAI operating models across the Aboitiz Group and promotes a data-driven culture throughout the organization. Its chief responsibility is to transform data into business outcomes, use information to make better decisions, reinvent business models, and develop high-value solutions to create new processes, products and services.

Championing financial inclusion

ADI has developed an AI-powered alternative credit scoring solution to help increase financial inclusion and sustainability nationwide.

With this, Aboitiz-led Union Bank of the Philippines (UnionBank) and its fintech arm UBX can now offer loans to a broader range of individuals and small businesses who may have not qualified under traditional scoring methods.

This initiative effectively doubled UnionBank’s loan approval rate, continuing to help connect the unbanked and underbanked to accessible financial services.

“Access to mainstream financial products and services is critical to realizing financial inclusion and sustainability. Our approach is proof that we can leverage AI and alternative data to help connect the underbanked to the greater ecosystem without compromising on risk appetite,” said Guy Sheppard, chief operating officer for financial services at ADI.

Based on the 2021 Financial Inclusion Survey of the Bangko Sentral ng Pilipinas (BSP), the share of Filipino adults with formal bank accounts almost climbed by 27 percentage points to 56 percent in 2021 from 29 percent in 2019. This is equivalent to 42.9 million Filipino adults with formal bank accounts last year from 20.9 million in 2019.

“Account ownership almost doubled in two years, the highest growth to date for the country. Ownership of a formal account is a basic indicator of financial inclusion. Account penetration significantly increased to 56 percent in 2021 from 29 percent in 2019, equivalent to an additional 22 million Filipinos opening an account within that period,” the BSP stated in the report.

According to the central bank, the number of unbanked Filipino adults dropped by 16.9 million to 34.3 million or 44 percent of the total adult population last year from 51.2 million or 71 percent in 2019.

Based on the 2021 World Bank Global Findex, the percentage of Filipino adults with an account in 2021 was higher than that of Cambodia (33 percent), Laos (37 percent), Myanmar (48 percent), and Indonesia (52 percent), but lower than that of Malaysia (88 percent), Thailand (96 percent), and Singapore (98 percent), among ASEAN countries.

Under its Digital Payments Transformation Roadmap, the BSP aims to increase the number of Filipino adults with formal accounts to 70 percent and shift 50 percent of total retail transactions to electronic channels by 2023.

Phl’s’ 1st techglomerate

By operationalizing DSAI across the Aboitiz Group’s business units, ADI is advancing an over-a-century-old company’s Great Transformation journey into becoming the Philippines’ first ‘techglomerate.’

ADI is working with AboitizPower to operationalize DSAI in power generation and distribution, grid, and power markets.

It continues to build capabilities enabled by DSAI that best orchestrate the growing complexities of the power industry – where power plants become more reliable, markets become less volatile, and renewable energy becomes more economically feasible.

This translates to a more efficient, less expensive, and more sustainable energy for all Filipinos.

In line with Aboitiz Power’s 2030 goal for a 50:50 balance between thermal and renewable energy generation, ADI’s role is to empower a sustainable transition into the future of generation through DSAI.

It continues to help transmission and distribution utilities transform the power grid by looking to DSAI to improve safety and resiliency, reduce operational cost, and increase customer satisfaction.

As geopolitical, socioeconomic, and technological factors shape power markets, ADI continues to look for avenues to innovate and reshape, resulting in the delivery of power in the best and most cost effective way.

Accelerated dev’t through smart cities

ADI is also providing advisory solutions to arm businesses and governments with relevant information and strategic directions to realize the power of data to be able to develop and deploy DSAI.

ADI empowers and supports businesses and government efforts to implement DSAI in smart cities – whether it’s the use of machine learning to develop efficient food waste management based on the needs of a target area, to strengthen a community’s commitment to responsible water management or even to employ responsible manufacturing processes for a growing population.

Smart cities are intelligent cities that are built to make lives better for the people living in them.

“I view smart cities from the perspective of learning – building smart cities that are enabled by data to learn and work in conjunction with the inhabitants. It’s not entirely about tech. For us at ADI, it’s incorporating AI that plays a huge role in learning to enhance the lifestyle and improve the livelihoods of the communities,” ADI chief operating officer for Smart Cities Alvin Ng said.

Leaving no one behind

The Aboitiz Group continues to connect its capabilities with the goals of the Philippine government on financial sustainability, affordable and sustainable energy, and accelerated development through smart cities.

During the 2021 Aboitiz Leaders Conference, Aboitiz Group president and CEO Sabin Aboitiz underscored that innovation must be instilled and not merely lived.

“An instilled value of innovation will help carry us through these disruptive times. The way we lead our organization will determine the future of all who depend on us,” Aboitiz said.

Aboitiz explains that the Aboitiz Group continues to take a long-term view and further champion innovative strategy and succeed amid and beyond the COVID-19 pandemic.