The Bangko Sentral ng Pilipinas (BSP) is studying new digital solutions as financial technology platforms proliferate, opening up new markets and access for broader segments of society while also increasing the risk of harm to unwitting consumers and investors.
BSP Governor Nestor Espenilla Jr. yesterday said they were working with RegTech for Regulators Accelerator (R2A), managed by global consulting firm BFA, to help develop cutting-edge digital supervision tools and techniques.
Espenilla said the project would make extensive use of data analytics, which involves organizing and analyzing large amounts of raw information.
“Fintech firms are often outside the straightforward oversight of central banks and other financial sector regulators,” Espenilla said during a talk at the headquarters of PLDT Inc.’s Voyager Innovations, which is behind digital platforms and payment solutions like Paymaya.
Espenilla said the BSP was considering two solutions: An API system, which streamlines the reporting requirements between the BSP and regulated entities such as banks, and an automated complaint handling portal, which establishes a direct link with customers.
Espenilla said the API System allowed data to be consolidated under a digital “warehouse” hosted by the BSP. The central bank then analyzes the data to generate reports of better accuracy and frequency.
He noted this would replace the dated way that regulated entities send reports to the BSP, which would processes the data manually.
Espenilla said the automated complaint handling portal, for its part, would provide a direct link between the BSP and the customers of regulated entities.
Through this system, clients can submit concerns through various communications platforms, including instant messaging apps, which will be processed “automatically” by the BSP. The automated nature of the technology, Espenilla added, would lessen the strain on the BSP’s staff.
“Through this system, customers gain access to the BSP, bridging the gap especially when they feel that their financial institutions are unresponsive,” Espenilla said.
He said the BSP was also closely monitoring other fintech platforms, including cryptocurrencies like Bitcoin; peer-to-peer lending, which matches individuals or businesses for loan deals, and crowd-funding, which matches entrepreneurs and investors.
Espenilla said regulations for these platforms could follow once they reach a certain scale. Citing crowdfunding, Espenilla said the industry was “still nascent in the Philippines.”
“It may not be time yet to issue regulations,” he said.