Banks told to leverage on technology

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has directed banks and financial institutions to leverage on technology in the submission of prudential reports as part of efforts to further enhance the supervision of all stakeholders in the industry.

BSP Deputy Governor Chuchi Fonacier said the regulator continues to enhance its supervisory reporting platforms and tools to strengthen surveillance activities.

“This is in line with the BSP’s thrust to promote the sustained safety and soundness of the financial industry,” Fonacier said.

The central bank issued Memorandum 2021–052 stating that it has adopted initiatives to efficiently gather and process information from BSP-supervised financial institutions (BSFIs), which include the migration to the Application Programming Interface (API)-based prudential report submission.

“This memorandum aims to provide information on the general requirements to migrate to API-based submission and enable banks to plan and prepare the necessary resources for the API adoption,” Fonacier said.

The API is a set of standard messages between two computer systems, the BSP and the submitting banks, making possible machine-to-machine submission and validation of reports and eliminating significant human intervention in the reporting process.

Fonacier said the migration to API-based submission would be implemented in phases based on the readiness of banks in recognition of the varied stages of information technology maturity of banks.

The BSP said the API would initially cover prudential reports including financial reporting package, report on the compliance with the mandatory agri-agra credit, report of selected branch accounts, expanded report on real estate exposures, report on electronic money transactions, financial reporting package for trust institutions, report on microfinance products and income statement on retail microfinance operations as well as report on compliance with mandatory credit allocation required under Republic Act 6977 or the Magna Carta for Micro, Small, and Medium Enterprises .

Other reports covered include the Basel III leverage ratio, Basel III capital adequacy report (CAR), computation of the risk-based CAR covering combined credit, market and operational risks, minimum liquidity ratio (MLR), Basel III report on net stable funding ratio (NSFR), published balance sheet, stress testing reports covering credit and market risks, report on cross-border financial positions, report on repurchase agreements, report on project finance exposures,

Fonacier said other prudential reports being submitted using other platforms would subsequently be scheduled for migration to the API-based submission.

She said banks are expected to comply with the minimum technical requirements and skills required for bank personnel within six months from start of development.

“The BSP shall closely coordinate with banks and industry associations to facilitate the migration process and build awareness and capacity on this initiative,” she said.

According to the central bank, banks that are not yet capable to migrate to API-based submission of prudential reports are allowed to submit through the web-based platform providing single access point for a defined time period.