BSP Assesses Financial Stability, Sets Out Open Finance Roadmap
The Central Bank of Philippines (BSP) announced that the Financial Stability Coordination Council (FSCC) has published the second financial stability report for 2021. The report discusses lessons learned from the pandemic, identifies policy issues that must be addressed to sustain the recovery, and addresses the availability of data for assessing systemic risk. The report lists data gaps in the area of shadow banking and non-bank financing, capital flows, corporate borrowing, granular data and micro data, real estate markets, insurance companies, and households. In addition, BSP issued a statement that the open finance roadmap (for 2021-2024) will boost digital transformation and stakeholder cooperation toward enhanced financial inclusion in the Philippines.
The open finance roadmap outlines priority actions, including the adoption of the policy framework, capacity building for regulation, and cooperative oversight. As per the BSP, open finance is expected to promote consent-driven data portability, interoperability, and collaborative partnerships among entities while extending the principles of data-sharing, security, and privacy across the different financial products. 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. In relation to this, BSP has formally recognized members of the OFOC Transition Group to facilitate initial policies and standards formulation. The Open Finance initiative has been 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. By using application program interfaces (APIs) to perform financial intermediation and make connections to share information, open finance is expected to facilitate digital retail payments, thus supporting the aim of digitizing half of total retail payments by 2023.
Additionally, during an inaugural meeting of the Management Association of the Philippines, the BSP Governor Benjamin E. Diokno highlighted that BSP is working toward a safe, sound, and resilient financial system by implementing the “RING” approach through the following initiatives:
- Risk management guidelines that will be continuously enhanced to be responsive to changing environment
- Integrity in the financial system and investor confidence
- New technologies that must be adapted to provide innovative financial products and services
- Governance standards that must be continuously strengthened to reinforce the conduct of supervised financial institutions
Related Links
- Press Release on Financial Stability Report
- Financial Stability Report (PDF)
- Press Release on Open Finance Roadmap
- Press Release on "RING" Approach
- Remarks of BSP Governor
Keywords: Asia Pacific, Philippines, Banking, Open Finance, Open Banking, Systemic Risk, Financial Stability Report, Data Gaps, Roadmap, API, Ring Approach, Open Data, BSP
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