BSP circulates open banking framework to stakeholders
Melchor Plabasan, director of the BSP’s Technology Risk and Innovation Supervision Department, said during a panel discussion during the World Fintech Festival Philippines the regulator is now seeking the comment of major stakeholders on the planned adoption of open finance framework.
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BSP circulates open banking framework to stakeholders

Lawrence Agcaoili (The Philippine Star) - December 14, 2020 - 12:00am

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has circulated the proposed open finance framework to stakeholders as part of the regulator’s three-year digital payments transformation program to boost financial inclusion and transform the country to a cash-lite from a cash-heavy economy.

Melchor Plabasan, director of the BSP’s Technology Risk and Innovation Supervision Department, said during a panel discussion during the World Fintech Festival Philippines the regulator is now seeking the comment of major stakeholders on the planned adoption of open finance framework.

The BSP is cognizant of the benefits of moving toward inclusive fintech ecosystems that espouses consent-driven data portability, interoperability and collaborative partnerships among incumbent financial institutions and fintech players.

It also recognizes the transformative benefits that can be derived from open finance that refers to the extension of permissioned data sharing and third-party access to a wider range of financial sectors and products.

The central bank released for public consultation the first version of the draft circular on open finance to show its regulatory strategy and collaborate with industry players in supporting the development and improving access to new financial products toward fostering broad-based and inclusive economic development.

Furthermore, consultation will be conducted without prejudice to the statutory powers and regulatory frameworks of the National Privacy Commission (NPC) and other financial regulatory agencies.

“In seeking to establish an open finance ecosystem, the BSP hopes to involve industry players and engage them in an active dialogue to facilitate mutual learning and optimal determination of an industry-led self-governing body/authority, which is expected to promulgate membership and participation rules and formulate standards and procedures for the industry,” the BSP said.

Stakeholders have until Dec. 23 to submit their comments that would be used to help enhance the proposed framework.

The proposal calls for the creation of an open finance oversight committee, an industry-led self-governing body tasked to promulgate its own membership and participation rules, as well as formulate its own standards and procedures.

The BSP is pushing a tiered approach covering product and service information; subscription and new account applications; account information; and others.

“The BSP seeks to provide a regulatory environment that is conducive for the deployment of innovative financial services, including developing standards for open finance,” it said.

Plabasan said the open banking framework, as well as the guidelines on digital banks issued by the BSP recently, are crucial to the country’s digital payments transformation roadmap.

“Given the crucial role, we hope regulators and policymakers will continue to wear their multiple hats as supervisor and at the same time enablers and catalyst for change,” Plabasan said.

BSP Governor Benjamin Diokno has committed to shift 50 percent of retail payment transactions to digital and double the number of Filipino adults with bank accounts to 70 percent by 2023.

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