BSP Governor Felipe Medalla
The Monetary Board has green lighted a regulatory approach that encourages banks and other entities supervised by the Bangko Sentral ng Pilipinas (BSP) to go “live” with the trial of technology-based new offerings without posing significant risks to financial stability or harming the consumers.
The so-called Regulatory Sandbox Framework formalizes the “test and learn” or T&L approach, a system that allows BSP-supervised financial institutions and their third-party service providers as well as new players to offer financial products and services using new technology to a limited number of customers in a controlled environment . In computing lingo, this is called a sandbox.
“The BSP has always championed responsible innovation since we see it as a catalyst to promote efficiency in the financial system and expand financial inclusion,” BSP Governor Felipe Medalla said in a statement.
“We are deeply committed to ensuring that attendant risks in using new technologies are effectively managed through enabling and responsive regulations,” Medalla said.
Under the framework, each sandbox will undergo a four-stage process—application, evaluation, testing and exit.
After a 12-month run of the sandbox project, the BSP will determine whether the product/service being tested is fit for broader or mass adoption.