BSP to adopt 2 regulatory technology solutions this year

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is adopting to regulatory technology (RegTech) solutions to strengthen its risk-based regulatory and supervisory activities.

BSP Deputy Governor Chuchi Fonacier said the regulator has committed to a “sandbox” approach with regards to adoption of relevant regulatory and supervisory technology solutions for the banking system.

The BSP adopted the “sandbox” or test and learn approach as early as 2004 by engaging e-money pioneers in the country prior to the issuance of e-banking framework.

“Currently, the BSP is exploring two RegTech solutions for implementation within the year,” Fonacier said.

These, she said, include the Application Programming Interface (API) to connect financial service providers to the BSP and the automated complaint-handling system or ‘chatbot’ that would allow financial consumers to submit their concerns to the BSP via SMS, Viber and web portal.

She said the BSP has partnered with RegTech for Regulators Accelerator (R2A) – a pioneering project that provides technical assistance for financial sector regulators to develop and test the next generation of digital supervision tools and techniques.

The BSP was the first financial authority to partner with R2A as it has requested the development of an API and back office reporting and visualization application.

The solution aims to allow financial institutions to submit data digitally and automatically to the financial authority as well as increase the volume, granularity, and frequency – and improve the quality – of data submitted to the central bank.

The program would also enable BSP staff to improve data validation and analysis, and generate customized reports for supervisory and policy development purposes.

By improving data quality and access, and developing new tools for data visualization and analysis, R2A would help the BSP implement a risk-based supervisory approach that reduces compliance costs and promotes financial inclusion while ensuring financial stability and integrity.

Furthermore, the BSP would be able to capture crisper insights on the Filipino financial sector that could be used to develop policies such as the financial inclusion strategy.

The BSP has also requested the development of a prototype chatbot that would allow financial consumers to file complaints through their mobile handsets via either an app or SMS, thereby creating new channels for them to correspond with the BSP.

By improving data quality and access and developing new tools for data visualization and analysis, the prototype will support the BSP’s efforts to provide all Philippine financial consumers with effective access to a complaint system.

Fonacier said the R2A project is fully funded by the United States Agency for International Development, Bill and Melinda Gates Foundation, and Omidyar Network.