The Bangko Sentral ng Pilipinas (BSP) has launched “Open Finance Roadmap 2021-2024” which is aimed to expand financial inclusion in the Philippines.
Pre-pandemic, Filipinos with bank accounts stood at 29%. By the first quarter of 2021, or a year after the COVID-19 pandemic which accelerated digital adoption across all sectors, the number significantly increased to 53%. With the roadmap, the government hopes to further increase the number to 70% under the Digital Payments Transformation Roadmap.
“Accelerating digitalization during the pandemic magnifies opportunities for wider connectivity,” said BSP Governor Benjamin Diokno. “We consider the release of the roadmap as timely and critical for fintech solutions, financial regulators, and market players.”
Open finance encourages collaboration and data sharing through Application Programming Interfaces (APIs), which is a set of standard messages between two computer systems that makes possible machine-to-machine submission and validation of reports. By using APIs to perform financial intermediation and to make connections to share information. Open Finance is expected to facilitate digital retail payments, supporting the aim of digitizing half of the total retail payments by 2023.
“The roadmap outlines priority actions, including the adoption of the policy framework, capacity-building for regulation, and cooperative oversight. It lays the groundwork for the establishment of an Open Finance ecosystem in the Philippines,” Diokno said.
With open financier, financial entities will be able to collaborate and extend consent-driven data sharing among themselves but still secure data privacy across the different financial products.
Building on the release of the Open Finance Framework, the roadmap allows collaborative engagements with the private sector for the establishment of the Open Finance Oversight Committee (OFOC) and the development of industry standards under a test-and-learn approach.
The Open Finance initiative is aligned with the BSP’s Digital Payments Transformation Roadmap 2020-2023 which aims to strengthen customer preference for digital payments and promote more innovative and responsive digital financial services.
“The BSP will continue to closely coordinate with other financial regulators to monitor developments, conduct internal discussions, and draw up plans to foster cooperative oversight and innovative regulation,” Diokno said.