The Bangko Sentral ng Pilipinas (BSP) looks to launch within the next three months a new framework that would regulate the customer-allowed sharing of financial data that is seen to create innovative financial solutions for both customers and financial institutions.
“The BSP is now refining the draft circular on open finance, based on comments we received from the industry, and we hope to finalize the circular within the second quarter of this year,” BSP Governor Benjamin Diokno announced during a virtual briefing on Thursday.
Citing the draft circular issued on December 23, he described open finance as referring “to the sharing and leveraging of customer-permissioned data among banks, other financial institutions and third parties to build innovative financial solutions, such as those that provide real-time payments, greater financial transparency options for account holders, marketing and cross-selling opportunities.”
Financial solutions include those providing real-time payments, greater financial transparency options for account holders, marketing and cross-selling opportunities, he said.
According to the central bank chief, the Bangko Sentral has consulted global subject matter experts, conducted a survey with BSP-supervised financial institutions, and completed a comparative study of the regulatory landscape in other jurisdictions to establish an open finance ecosystem.
“The underlying idea of open finance is that customers are the owner of transaction data, which could be shared if [they] wish to do so,” Diokno said.
In line with this, he said, the draft circular adopts consent-driven data portability, interoperability and collaborative partnerships among existing financial institutions and new third-party players that adhere to the same standards of data security and privacy.
It encourages information-sharing among financial institutions in the course of developing innovative financial services for customers. It also emphasizes data security as consumers and businesses share critical information, he added.
Diokno also said an industry-led oversight body under the Bangko Sentral’s supervision would also be set up under the framework.
“The oversight body will promulgate standards and rules for entities participating in the open finance ecosystem. The BSP expects the said body to adopt a nondiscriminatory membership policy,” he explained.
Such a policy would ensure that key stakeholders are adequately represented, and that all members and applicants are treated fairly and consistently. doing so, both big and small players can join the ecosystem catering to a defined need or market, according to him.