Microfinance institutions (MFIs) may harness the Philippine Identification System (PhilSys ID) as well as digital technologies to keep abreast with big players, according to the Bangko Sentral ng Pilipinas (BSP).
BSP data show that there are 149 microfinance banks that provide products and services to 2.05 million borrowers as of the first quarter of 2021.
BSP Governor Benjamin Diokno urged MFIs to explore digital innovations under the the regulator’s Digital Payments Transformation Roadmap (DPTR), which envisions 70 percent of Filipino adults owning a transaction account and at least half of transactions done digitally by 2023.
Diokno said the PhilSys ID, the rollout of which is a key DPTR initiative, may be used to conduct “know-your-customer” activities online and in real time to reduce onboarding costs.
Also, MFIs can tap as service partners the digital banks, a policy on which the BSP issued following the DPTR.
Compared to traditional banks, a digital bank offers financial products and services that are processed end-to-end through a digital platform or electronic channel.
In November, the BSP reminded the public that the PhilSys ID is considered sufficient proof of identity to open a bank account.
Back then, Diokno said the PhilSys ID would help more Filipinos, especially the marginalized and low-income, to begin saving money in banks and other BSP-supervised financial institutions.
In light of this, the BSP has instructed financial organizations that the PhilSys ID, in both physical and mobile formats, shall be accepted as sufficient proof of identity without the need for another ID.
Financial institutions were also directed to include the PhilSys ID in their list of valid IDs to be displayed on their counters, public entrances of their establishments, websites, social media accounts, and other consumer information channels.
PhilSys is expected to transform how services are delivered and accessed in the Philippines.