BSP rolls out ‘open finance’ framework

The Bangko Sentral ng Pilipinas (BSP) has rolled out a policy framework for “open finance,” which enables banks to reduce transaction costs and promises better experience for customers.

“We must fully recognize the breadth and depth of open finance as it would entail a wide-ranging scope of activities covering a broader array of financial products and involving multiple stakeholders across the financial sector,” BSP Assistant Governor Lyn Javier said in a statement.

The road map outlines priority actions that would require capacity building, development and adoption of industry accepted standards under a test-and-learn approach, and the implementation of a robust and scalable framework that is fundamental to establishing an open finance ecosystem.

Industry represented

To do this, the BSP formed an Open Finance Oversight Committee Transition Group comprising representatives of the industry segments—universal and commercial banks, thrift banks, rural banks, digital banks, e-money issuers and other players, operators and payment systems and fintech.

Respectively, the industry segments are represented in the transition group by the Bank of the Philippine Islands, Philippine Savings Bank, Cantilan Bank, Tonik Digital Bank, OmniPay, CIS Bayad Center and FinTechAlliance.PH as well as FinTech Philippines Association.

“As part of the core team that will drive this open finance initiative to impactful and life-changing opportunities for the ordinary Juan and Maria, all of us should mark this event with a sense of duty and responsibility to our nation and countrymen in elevating the level of financial inclusion and at the same time, maintaining the integrity of the entire financial system,” BSP Deputy Governor Chuchi Fonacier said.

Also supported by the World Bank and the International Finance Corp. (IFC), this initiative is aimed at promoting partnerships and digital transformation as key enablers of economic resilience and financial inclusion.

IFC country manager Jean Marc Arbogast said that open finance aimed to provide customers with greater choice and control over how they interact with financial institutions, and can lead to deeper and more dynamic markets in which customers enjoy a better experience, more choice and better access to a range of financial products and services.

Financial inclusion

Arbogast said open finance could help accelerate financial inclusion by improving access to credit, improving the tools available for micro, small- and medium-sized enterprises to manage day-to-day finances and transactions, and alleviating the lack of digital documentation among Filipinos.

“We will draw on our extensive global network of experience in designing and implementing open finance in emerging markets,” he said.