BSP Launches Open Finance Pilot, Issues Financial Stability Report
The Central Bank of Philippines (BSP) is seeking participation from the supervised financial institutions and third-party providers on "standards consultation" for the Philippine Open Finance Pilot; this is intended to inform the development of open finance technical and operational standards and arrangements. Additionally, the Financial Stability Coordination Council (FSCC) of BSP published the financial stability report for 2022.
The Philippine Open Finance Pilot is a collaborative undertaking of financial institutions and third-party providers, participating on a voluntary basis, to explore the use of Application Programming Interface (API) technologies in the delivery of financial products and services responsive to the needs of customers. BSP recognizes that the Open Finance Pilot is an important initiative in promoting a responsive, inclusive, and responsible digital financial ecosystem that is characterized by innovation-driven use of consumer data. The activities of the Open Finance Pilot, which will operate through the support of the International Financial Corporation (IFC), will be governed pursuant to Circular No. 1122 and is to be monitored by the Open Finance Oversight Committee Transition Group (OFOC TG). By February 2023, 19 organizations have volunteered to be part of the Standards Consultation Working Group.
The financial stability report highlights the importance of building financial resilience amid fast-changing market conditions in a volatile, uncertain, complex, and ambiguous (VUCA) environment. The report highlights that banks have been in a strong position despite risks to the system while keeping the expected asset quality impairment low. The report mainly focuses on interlinkages both within the economy and across jurisdictions to manage systemic risks. It notes that the banking system is resilient and can absorb a hypothetical stress situation. The mandate of the Council remains to nurture the resilience of the financial system from disruptions. Overall, the Council remains cautiously optimistic of the country’s prospects but realistically grounded on the likelihood of change.
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Keywords: Asia Pacific, Philippines, Banking, Open Finance, Open Finance Oversight Committee, Systemic Risk, Financial Stability, Regtech, Fintech, BSP
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