BSP pushes cross-border cyberwatch in Asean

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is pushing for an intensified cross-border surveillance among members of the Association of Southeast Asian Nations (ASEAN) amid rising cybersecurity concerns.

BSP Governor Amando Tetangco Jr. issued the call amid the ongoing regional integration with the transformation of 10 ASEAN jurisdictions into a single market through the ASEAN Economic Community.

He pointed out that qualified accredited banks (QABs) under the ASEAN Banking Integration Framework (ABIF) would effectively extend the reach of one jurisdiction by having “outposts” outside its national borders.

He said ABIF should also provide a financial highway that would harness the potential of ASEAN by developing the capacity to clear and settle intra-ASEAN trade and investments without depending on traditional correspondent banks.

All these, he explained, should hasten regional commerce and provide the means to parlay the growth of ASEAN, its young and dynamic retail market with high disposable income and unparalleled saving potential.

 “But we should also be cognizant of possible downside risks. In this regard, the logical mitigating factor is effective cross-border surveillance and the ability to take collective but pre-emptive actions,” he added. 

However, the BSP chief explained member states are at different stages of financial market development.

“Furthermore, the 10 jurisdictions may very well respond differently to the same risk due to idiosyncratic factors in their local markets. Effectively then, information becomes the commodity and how we handle it becomes the value proposition of the product,” he said.

 In this day and age of financial technology, Tetangco said ASEAN is taking advantage of the expediencies that ‘fintech’ offers but the region should still have to be wary of the cyber-security issues.

He explained these issues include the increasing trend of phishing and identity theft cases.

“Cross-border commerce is literally consummated in a few keyboard strokes, which highlights how the human intervention part of fintech can possibly compromise prudential standards and create trouble,” Tetangco said. 

According to the BSP chief, it is crucial to keep individual financial institutions and the overall financial system safe and sound.

“In addition, it would be beneficial if you turn your economic research towards deepening our understanding of the human behavior side of markets. This should help us be more adept at finding the convergence points among policy intent, market expectations and the eventual outcomes of market behavior,” he said. 

In late February, hackers tried to steal $1 billion from the account of Bangladesh Bank at the Federal Reserve Bank of New York. About 30 of the 35 transactions were foiled but five transactions worth $81 million entered the Philippines as the hackers used Rizal Commercial Banking Corp. (RCBC) as a conduit.