BSP: Banks now allowed ­to submit reports via AI

MANILA, Philippines — The Bangko Sentral ng Pilipinas is simplifying the reporting requirements of banks and financial institutions through artificial intelligence (AI) to improve the timeliness, ease, and integrity of data submission.

BSP Governor Benjamin Diokno said the regulator has developed a prototype that allows machine-to-machine link between the BSP’s system and those of its supervised entities for streamlined transmission, processing, warehousing, and analysis of banks’ prudential reports.

“Targeted to go live by the latter part of 2020, this innovation will significantly improve timeliness, ease, and integrity of data submission,” Diokno said.

The BSP chief said the regulator continues to pilot test the use of regulatory technology and supervisory technology including the use of AI, machine learning and application program interface (API) to enhance the timeliness and quality of risk-based decision making.

Diokno added an API system automates the collection, processing and analysis of data from supervised institutions.

He said banks are burdened by an extensive and time-consuming validation process involving more than 240 Excel-based data entry templates with 100,000 plus data points.

“The resulting delays and the scope for human error posed complications on our data and statistical compilation operations. With this modern API system, manual intervention is eliminated since data sorting, sanitation and validation processes are fully automated and secured,” he said.

With the same 7,000 data validation rules still being applied, Diokno said processing time of filed returns was cut to just 10 seconds from more than 30 minutes, thereby streamlining the entire end-to-end process of regulatory reporting and validation.

For the less sophisticated supervised entities that cannot immediately migrate to the API-based reporting, Diokno said the BSP developed a central automated reporting environment referred to as the FI (financial institution) portal.

“The FI portal provides a single electronic platform upon which FIs can submit reports, receive feedback on its acceptability, and exchange correspondences with the BSP on matters related to report submissions. It offers a more secure encrypted process of submission through a web facility where supervised entities can upload their reports instead of sending them via regular email,” he added.

Diokno said an automated chatbot system would also go live by mid-2020 to adequately and efficiently handle consumer concerns using AI and natural language processing.