Central Bank of Philippines launches open finance framework for digital transformation

Category: Asia Fintech Regulatory
Posted by Lea Hogg

The Bangko Sentral ng Pilipinas (BSP) has launched the Open Finance Framework, a significant step towards economic resilience of digital transformation.

Open Finance empowers customers by giving them greater control over their data and enabling them to share it with third-party providers across various financial products and services. This not only benefits businesses and individuals by offering improved financial products, but also allows financial institutions to reduce transaction costs and customize products according to evolving customer needs.

Three-year roadmap

The BSP has adopted a three-year Open Finance Roadmap 2021-2024 to guide the implementation, emphasizing capacity building, industry-accepted standards, and a robust framework. The launch involved the participation of the Open Finance Oversight Committee Transition Group, financial institutions, third-party providers in the regulatory sandbox, and international partners from the World Bank and the International Finance Corporation. The event symbolizes the BSP’s commitment to promoting financial inclusion and maintaining the integrity of the financial system. It marks the beginning of a transformative journey towards an Open Finance ecosystem, encouraging collaboration, responsible innovation, and interoperable standards.

Fintech making an impact in the Philippines

The central bank of the Philippines, plays a crucial role in the country’s economic stability and financial system. Established in 1949, the BSP has undergone significant transformation to fulfil its mandate effectively. It is responsible for maintaining price stability, promoting a sound financial system, and ensuring the stability of the Philippine peso. Over the years, the BSP has implemented various reforms to enhance transparency, strengthen banking regulations, and develop fintech.

The fintech sector in the Philippines has been experiencing significant growth and innovation. With a large unbanked population and increasing smartphone penetration, fintech companies are leveraging from technology to provide financial services and promote financial inclusion. Mobile payments, remittance platforms, and digital lending are some of the key areas where fintech is making an impact. The government has been supportive of the sector, introducing regulations and initiatives to encourage fintech development. Collaboration between traditional financial institutions and fintech start ups is also on the rise, driving the evolution of the financial landscape in the Philippines towards new opportunities in banking digitization.

Open Finance Framework indicates commitment to banking digitization

In recent developments, the BSP has launched initiatives to promote digital transformation and financial inclusion. The introduction of the Open Finance Framework is a prime example, aiming to facilitate collaborative partnerships and give customers greater control over their data for improved financial products and services. The BSP has also focused on adopting technology-driven solutions to enhance payment systems, support digital banking, and promote fintech innovation.

Additionally, the BSP has prioritized financial education and consumer protection, seeking to empower Filipinos with the necessary knowledge and safeguards to make informed financial decisions. Through its robust supervision and regulatory framework, the BSP strives to maintain a stable and resilient financial sector. BSP has been successful in adapting the evolving needs of the economy and financial landscape, driving sustainable growth and ensuring the welfare of the Filipino people.

Appointment of new Central Bank Governor

In the meantime, Monetary Board member Eli Remolona has been appointed as the new Governor of the Bangko Sentral ng Pilipinas (BSP), succeeding Felipe Medalla.

Prior to joining the BSP, Remolona held significant positions in both the banking and academic sectors. He served as an Independent Director of the Bank of the Philippine Islands, where he also chaired the Risk Management Committee, showcasing his expertise in overseeing risk management practices.

Remolona’s impressive academic background includes being a Professor of Finance and the Director of Central Banking at the Asia School of Business in Kuala Lumpur, in collaboration with the prestigious MIT Sloan School of Management. His extensive experience also extends to his tenure as the regional head for Asia and the Pacific at the Bank for International Settlements (BIS), where he worked closely with governors of leading central banks in the region on crucial policy matters related to financial regulatory reform, capital market development, and financial stability. With 14 years of experience at the Federal Reserve Bank of New York, Remolona brings a wealth of knowledge and a global perspective to his new role.

The banking industry welcomes Remolona’s appointment, with Jose Teodoro K. Limcaoco, President of the Bankers Association of the Philippines (BAP), expressing confidence in Remolona’s ability to ensure the stability and growth of the Philippine banking industry, as well as promote competitiveness in the regional landscape.

The BAP said that it looks forward to having Governor Remolona on board. The new appointment will make a positive impact on the banking industry, including fintech, cybersecurity, and sustainability.

 

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