The Bangko Sentral ng Pilipinas (BSP) has formed a seven-person Open Finance Oversight Committee Transition Group (OFOC-TG) as the interim governing body to lead the establishment of an open finance ecosystem in the country.
BSP Governor Benjamin E. Diokno, who signed the circular letter on Jan. 4, released the official list of primary and alternate members representing the universal and commercial banks, thrift banks, rural banks, digital banks, e-money issuers, operators of payment systems and financial technology or fintech sector.
The BSP is implementing a three-year (2021-2024) open finance program.
The members of the OFOC-TG, which will serve for a two-year term, have the responsibility to facilitate the initial policies and standards formulation. They will also support pilot implementations under the open finance regulatory sandbox.
In a separate statement, the BSP said that with the OFOC-TG, it has formally launched the Open Finance Framework.
The OFOC TG members will be supported by participating financial institutions and third-party providers in the regulatory sandbox, as well as the World Bank and the International Finance Corp. (IFC).
BSP Deputy Governor Chuchi G. Fonacier noted that open finance will be “impactful and life-changing” for the ordinary Juan and Maria. “All of us should mark this event with a sense of duty and responsibility to our nation and countrymen in elevating the level of financial inclusion and at the same time, maintaining the integrity of the entire financial system,” said Fonacier.
Meantime, BSP Assistant Governor Lyn I. Javier said open finance “would entail a wide-ranging scope of activities covering a broader array of financial products and involving multiple stakeholders across the financial sector.
In a virtual open finance forum, IFC Country Manager Jean Marc Arbogast said open finance “aims to provide customers with greater choice and control over how they interact with financial institutions.”
“It can lead to deeper and more dynamic markets, in which customers enjoy a better experience, more choice, and better access to a range of financial products and services,” said Arbogast. He also emphasized the continuing support and commitment of both the World Bank and IFC. “We will draw on our extensive global network of experience in designing and implementing Open Finance in emerging markets,” he said.
BSP Director for Technology Risk and Innovation Supervision Department, Melchor T. Plabasan, with the framework in placed, financial institutions and third parties will be able to “develop and offer a wide array of digital financial products that are both responsible and responsive to customers’ evolving needs.”
Open finance will accelerate financial inclusion by improving access to credit and improving the tools that micro, small and medium enterprises can tap. Basically, as defined by the BSP, open finance is the extension of data sharing principles, assigning greater control to customers over their own data and enabling them to allow third party providers access to their data across multiple financial products and services.
Open finance “can offer both businesses and individuals better financial products and services (and) also provides financial institutions the opportunity to reduce their transaction costs, as well as the ability to better tailor their products to the evolving needs of customers,” said the BSP.