The European Chamber of Commerce of the Philippines’ (ECCP) Special Committee on Open Finance and Financial Inclusion (SCOFFI) will support the new administration’s initiatives to promote financial inclusion and open finance.

By reducing transaction costs through consent-driven data portability, interoperability, and collaborative partnerships among financial institutions and third-party providers (TPPs), open finance seeks to provide customers with a better banking experience.

Under open finance, industry players are able to create customer-centric products and provide better access to critical financial services such as savings, insurance, and credit.

This wholly-inclusive ecosystem seeks to close the gap when it comes to access to formal financial institutions. The BSP targets to bring at least 70-percent of adult Filipinos into the formal financial system by 2023. With 47 percent of the population still unbanked, the Philippines has a long way to go before it can hit its target.

“The role of financial inclusion in developing the economy should not be underestimated. In fact, it should be a priority. After all, including critical segments into the country’s financial systems is crucial to helping the economy recover from the ill-effects of the pandemic. Hence, we at the ECCP-SCOFFI vow to support the incoming administration in its initiatives towards financial inclusion and open finance,” ECCP-SCOFFI Chair John Januszczak explained.

According to the BSP, financial inclusion is defined as “the state in which everyone, especially the vulnerable sectors, has effective access to a wide range of financial services.” This means that vulnerable sectors have the available tools which respond to the varied needs of individuals and businesses alike — whether for saving, payments, business financing, investing, or insurance.

One of the underserved sectors sought to be benefited by open finance are the micro, small and medium-sized enterprises (MSMEs). Businesses under this umbrella–sari-sari stores, carinderia, and fish stalls — rely on small loans to keep their businesses afloat. Lack of financing and capital remains to be the main barrier in spurring growth in the sector. With financial inclusivity, there would be faster credit access from legitimate lenders.

Farmers are expected to benefit from financial inclusion as well as it will help them gain access to financing, providing them with the tool to grow their production.

“Financial inclusion requires deliberate and coordinated action among all of the stakeholders, and the government plays a major role in pushing for this agenda. I truly hope that our new leaders will be keen on advocating for the vulnerable sectors to be included in our financial systems,” Januszczak, who also sits as the President and CEO of open finance leader UBX, said.

ECCP-SCOFFI was established to promote financial inclusion in the Philippines. It was established to provide an avenue for stakeholders to discuss issues and solutions to the status quo while fostering financial inclusion through technology. Together with UBx, the leading open finance platform in the Philippines, the Special Committee has been a big help to the BSP when it comes to formulating open finance standards and procedures for better implementation. On other recent initiatives, the Special Committee also engaged with the Insurance Commission in discussions on maximizing technology in the insurance sector to further drive financial inclusion. With this, the ECCP and its Special Committee published its Philippine Insurtech Sandbox Whitepaper.

Now, with big changes expected in the Philippines come June 2022, Januszczak calls on the newly elected leaders, policymakers, and even industry players to uphold the BSP’s agenda. “The road ahead is long, but our drive is strong enough to help traverse this path. With support from the government, the ECCP, UBX, and our partners are ready to champion welfare-enhancing financial services and inclusivity for all Filipinos,” said Januszczak.