BSP recalibrating e-money, tech outsourcing framework

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is recalibrating and strengthening existing policies on electronic money as well as technology outsourcing amid the exponential rise in digital transactions due to mobility restrictions.

BSP Governor Benjamin Diokno told members of the Fintech Alliance Philippines during its second general membership meeting that the regulator is currently revisiting, recalibrating and fortifying existing policies.

“The BSP is undertaking policy initiatives to amend its e-money and technology outsourcing circulars, and formalize the BSP’s test-and-learn approach or regulatory sandbox,” Diokno said.

He also said the BSP is transitioning to a new supervisory rating framework, which hinges on stronger offsite supervision.

“All these initiatives aim to support the digital transformation initiatives of BSP-supervised financial institutions, including fintech players, while promoting sound risk technology and cyber risk management,” Diokno said.

Fintechs are companies that offer breakthrough platforms, services and digital systems to automate, expand and facilitate access to financial services.

The BSP chief told members of the organization to seize opportunities presented by the rise in digital transactions and issuance of supportive e-payment policies in developing innovative solutions.

“Strike while the iron is hot. Tap into your innovation DNA to create worthwhile solutions. The conditions are ripe and the time to act is now,” Diokno said.

Latest data showed InstaPay transaction volume and value rose by 64 percent and 103 percent, respectively as of end-July, while PESONet transaction volume and value also grew by 190 percent and 50 percent, respectively.

Meanwhile, the BSP issued policies on digital banking to encourage better delivery of financial services of digital banks without the constraints of brick-and-mortar operations, and on open finance to promote greater interoperability and collaboration among financial institutions and fintechs.

The regulator has imposed a three-year moratorium on the grant of digital banking licenses starting this month to closely monitor the performance and impact of the new banking classification on the industry.

It also limited the number of players in the new banking classification at seven.

So far, the Monetary Board has approved the digital banking licenses of Overseas Filipino (OF) Bank, Tonik Digital Bank, UNObank, Union Digital Bank as well as GOtyme.

The BSP is evaluating the application of two more entities for digital banking licenses. PayMaya’s Voyager Innovations has a pending application with the BSP.