[OR] [UBP] [E3] [CBS] [1] [DP] Deposit and Account Services

CBS-1 Deposit & Account Services

For Union Bank of the Philippines, the ability to deliver Deposit and Account Services (CBS-1) consistently, securely, and without interruption is fundamental to maintaining customer trust and financial system stability.

As one of the core banking services, CBS-1 encompasses a wide range of interconnected processes that support customer onboarding, account management, transaction processing, and regulatory compliance.

In the context of operational resilience, it is no longer sufficient to view this service at a high level. Instead, banks are required to decompose critical business services into granular, manageable components, referred to as detailed processes or Sub-CBS.

This level of detail enables the organisation to better understand how services are delivered, identify dependencies, and assess vulnerabilities across people, processes, technology, and third-party providers.

Aligned with the expectations of BSP Circular No. 1203 Series of 2024, this chapter provides a structured breakdown of CBS-1 into its constituent Sub-CBS.

This decomposition forms the foundation for subsequent operational resilience activities, including dependency mapping, impact tolerance setting, and scenario testing.

Purpose of the Chapter

The purpose of this chapter is to equip the reader with a clear and structured understanding of the detailed processes that underpin CBS-1 Deposit and Account Services within Union Bank of the Philippines.

By presenting these Sub-CBS in a systematic manner, the chapter enables stakeholders to appreciate how each process contributes to the end-to-end delivery of the service, and how disruptions at any point may affect overall service continuity.

In alignment with the BSP Circular No. 1203 Series of 2024, the following table presents the detailed business processes (Sub-CBS) underpinning the critical business service CBS-1: Deposit and Account Services.

These processes reflect end-to-end service delivery and are structured to support operational resilience by clearly identifying dependencies, impact tolerances, and scenario testing readiness.

Table P1: Detailed Processes for CBS-1

Sub-CBS Code	Name of Sub-CBS	Description of Sub-CBS
1.1	Customer Onboarding and Account Application	Captures customer information through digital or branch channels, including account selection, application submission, and initial data validation.
1.2	Customer Identification and Verification (KYC/CDD)	Performs identity verification, screening against sanctions/PEP lists, and compliance with AML/CFT requirements in accordance with regulatory standards.
1.3	Account Approval and Opening	Reviews application data, performs risk assessment, and approves account creation within core banking systems.
1.4	Initial Funding and Deposit Booking	Facilitates first deposit transactions via cash, cheque, or electronic channels and records them in the core banking system.
1.5	Product Terms Setup and Account Parameter Maintenance	Configures account attributes such as interest rates, fees, limits, and product features based on approved product structures.
1.6	Deposit Transactions Processing	Handles routine transactions, including deposits, transfers, and credits, through branches, ATMs, and digital banking platforms.
1.7	Withdrawal and Funds Access Processing	Enables customer withdrawals through multiple channels (ATM, branch, digital) while ensuring transaction validation and limits enforcement.
1.8	Account Servicing and Customer Maintenance	Updates customer records, handles service requests, and maintains account information, including address changes and account upgrades.
1.9	Interest, Fees, and Charges Processing	Calculates and applies interest accruals, service fees, penalties, and other charges based on account terms and schedules.
1.10	Statement, Passbook, and Balance Reporting	Generates account statements, passbook updates, and provides real-time balance information across channels.
1.11	Digital Account Access and Channel Integration	Provides customers with access to accounts via mobile apps, internet banking, and APIs, ensuring seamless integration across channels.
1.12	ATM and Card-Based Access Management	Manages issuance, activation, and maintenance of debit cards and ATM access, including PIN management and transaction authorisation.
1.13	Account Reconciliation and Exception Handling	Performs daily reconciliation of transactions, identifies discrepancies, and resolves exceptions to ensure ledger accuracy.
1.14	Dormancy, Holds, Restrictions, and Account Control Administration	Applies regulatory or operational controls such as account dormancy tagging, freezes, garnishments, and restrictions.
1.15	Fraud Monitoring and Transaction Surveillance for Deposit Accounts	Monitors transactions for suspicious activity using fraud detection systems and escalates alerts for investigation.
1.16	Complaints, Disputes, and Service Recovery	Handles customer complaints, dispute resolution (e.g., failed transactions), and ensures timely remediation and communication.
1.17	Regulatory Reporting and Compliance Monitoring	Prepares and submits required regulatory reports (e.g., deposit liabilities, AML reports) and ensures ongoing compliance with BSP requirements.
1.18	Business Continuity and Service Recovery for Deposit Services	Activates continuity plans, recovery strategies, and alternate processing arrangements to maintain service availability during disruptions.

Regulatory Requirements and Operational Resilience Considerations

Under BSP Circular No. 1203 (2024), Philippine banks, such as Union Bank, are required to embed operational resilience in their critical business services, including CBS-1. Key requirements and how they apply to the above Sub-CBS include:

1. Identification of Critical Business Services

Banks must identify services whose disruption would significantly impact customers or financial stability.
Example:
- Deposit withdrawals (Sub-CBS 1.7) and digital access (1.11) are critical to customer trust and access to liquidity.

2. Mapping of Interdependencies

Banks must map dependencies across people, processes, technology, and third parties.
Example:

Sub-CBS 1.6 depends on core banking systems, payment networks, and telecom infrastructure.
Sub-CBS 1.2 relies on external KYC utilities and government ID databases.

3. Setting Impact Tolerances

Institutions must define maximum tolerable disruption thresholds (e.g., time, data loss).
Example:

Digital banking access (1.11) may have an impact tolerance of near-zero downtime.
ATM access (1.12) may allow minimal disruption but requires rapid failover.

4. Scenario Testing (Severe but Plausible Events)

Banks must test resilience against scenarios such as cyberattacks, system outages, or third-party failures.
Example:

Cyberattack affecting fraud monitoring systems (1.15).
Data center outage impacting transaction processing (1.6, 1.7).

5. Business Continuity and Recovery Capability

Banks must ensure continuity strategies are in place and regularly tested.
Example:

Sub-CBS 1.18 ensures alternate processing sites and manual fallback procedures are available.

6. Governance and Continuous Improvement

Senior management must oversee resilience frameworks and ensure continuous monitoring and improvement.
Example:

Regular review of reconciliation processes (1.13) and compliance reporting (1.17) to detect systemic weaknesses.

The decomposition of CBS-1 Deposit and Account Services into detailed Sub-CBS provides a critical lens through which Union Bank of the Philippines can assess and strengthen its operational resilience posture.

By breaking down the service into its core components, the organisation gains visibility into how value is delivered to customers and where potential points of failure may exist.

This structured approach not only supports compliance with BSP Circular No. 1203 Series of 2024 but also enables more effective planning, testing, and continuous improvement of resilience capabilities.

As the organisation progresses to subsequent stages—such as dependency mapping, impact tolerance setting, and scenario testing—the Sub-CBS defined in this chapter will serve as the essential building blocks to ensure that critical services remain within acceptable levels of disruption, even under severe but plausible scenarios.

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