In the wake of the coronavirus outbreak, the Philippine central bank is asking the country’s financial technology firms to take advantage of the surge in digital transactions and favorable regulatory policies to grow their industry and provide much-needed services to Filipinos.
Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP) recently stated at the Fintech Alliance Philippines’ second general membership meeting that the continuing public health crisis has resulted in a boom in electronic transactions in terms of volume and value.
“Strike while the iron is hot,” he said, referring to companies that offer breakthrough platforms, services and digital systems to automate, expand and facilitate access to financial services. “Tap into your innovation DNA to create worthwhile solutions. The conditions are ripe and the time to act is now.”
The central bank noted a significant spike in digital transactions amid the pandemic.
As of end-July 2021, InstaPay transaction volume and value rose by 64 percent and 103 percent, respectively, relative to the same period in 2020. Meanwhile, PESONet transaction volume and value also grew by 190 percent and 50 percent, respectively, as of end-July 2021.
In recent months, the BSP issued policies on digital banking to encourage better delivery of financial services of digital banks without the constraints of brick-and-mortar operations, and on open finance to promote greater interoperability and collaboration among financial institutions and fintechs.
Furthermore, to revisit, recalibrate and fortify existing policies, the BSP is undertaking policy initiatives to amend its electronic money and technology outsourcing circulars, and formalize its test-and-learn approach or “regulatory sandbox.”
BSP is also transitioning to a new supervisory rating framework, which hinges on stronger offsite supervision.
All these initiatives aim to support the digital transformation programs of BSP-supervised financial institutions, including fintech players, while promoting sound risk technology and cyber risk management.
Earlier this year, the central bank and the country’s other financial regulators also agreed to come up with a unified monitoring and supervision scheme for the local fintech industry without stifling these firms’ new and creative ideas.
To this effect, a memorandum of agreement was signed under the auspices of the multiagency Financial Sector Forum on the establishment of a cooperative oversight framework on fintech innovation.
The framework aims to facilitate seamless regulation and supervision of fintech companies across the financial sector leveraging on the consultative and collaborative platform under the agreement.