The Bangko Sentral ng Pilipinas (BSP) said there will more customer-centric financial products with the implementation of the Open Finance Framework.
BSP Governor Benjamin E. Diokno said the underlying idea is that customers are the owners of transaction data and consumers will have the power to grant access to their financial data and to tap customer-centric products.
“Customers (are the) owners of their transaction data, which can be shared if they wish to do so,” according to Diokno. “With more data shared, Fis (financial institutions) and third-party players are incentivized to adopt a customer-centric product development cycle,” he said in a recent private sector event.
It would take some time yet to develop customer-centric banking products and services but with more access to consumer data, banks and third-party providers could tailor fit banking products and services, investments, pension, and insurance to what consumers actually need.
BSP Circular No. 1122 or the Open Finance Framework was issued last June. It is part of the BSP’s Digital Payments Transformation Roadmap.
The BSP defines open finance as a consent-driven data sharing scheme that follow the same standards of data security and privacy among banks, other financial institutions and third-parties for financial solutions such as those that provide real-time payments, financial transparency options for account holders, marketing and cross-selling opportunities.
The BSP is working with the private sector for the creation of an Open Finance Oversight Committee (OFOC) which is an industry-led self-governing body. This body, to be completed within the year, is tasked to adopt, update and enforce the rules of conduct of an open finance system.
The OFOC will set its own standards and procedures, and promote what the central bank described as a “non-discriminatory membership” that will represent all relevant sectors such as banks, non-bank financial institutions, electronic money issuers and operators of payment systems.
Open finance and open banking is included in the BSP’s three-year digital payments transformation roadmap which aims to convert at least 50 percent of the total volume of retail payments into digital form and to onboard at least 70 percent of Filipino adults to the financial system.
Also called open bank data, it provides information to third-party financial service providers through application programming interfaces or APIs.