MANILA, Philippines — The central banks of the Philippines and Singapore have forged closer ties for financial technology (FinTech) to promote innovation in financial services in their respective markets.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. and Monetary Authority of Singapore (MAS) managing director Ravi Menon signed a fintech cooperation agreement last week on the sidelines of the 2nd Singapore FinTech Festival.
Espenilla said the agreement serves as a seal of commitment between BSP and MAS to elevate financial innovation in both countries.
“The cooperation agreement provides avenues for greater collaboration through a more defined structure and referral system for FinTech players between the innovation functions of each authority,” Espenilla said.
Espenilla added the BSP looks forward to exciting times ahead as the cooperation agreement unlocks diverse opportunities for new collaborations to prosper and maximize the benefits of innovative technologies.
“This would ultimately pave the way for a more progressive, modern and inclusive financial system,” he said.
Under the agreement, both central banks agreed to refer promising FinTech firms to each other, share emerging FinTech trends and developments, and facilitate work on FinTech projects together.
These projects involve tapping on new financial technologies, like distributed ledgers, to provide innovative solutions to industry problems, such as facilitating faster cross-border payments and streamlining “know-your-client” processes.
Menon said both central banks are like-minded in their focus on harnessing financial technology to reduce inefficiency and benefit individuals and businesses.
“This cooperation agreement between our two agencies provides a framework for promoting financial innovation not only in our countries but can also potentially contribute to broader efforts in the region,” Menon said.
The BSP is also looking at initiating discussions with MAS for the ASEAN Banking Integration Framework that was first endorsed in December 2014.
The Philippines forged a deal with the Bank of Negara Malaysia that would allow three qualified ASEAN banks from one country to set up shop in the other country.