The Bangko Sentral ng Pilipinas (BSP) is proposing a new risk-based supervisory framework to strengthen consumer protection and enhance oversight of local financial institutions.

The proposal, which aims to formalize the Financial Consumer Protection Risk-and-Impact Supervisory Model (FCPRISM), marks a shift in how the central bank monitors the operational integrity of BSP-supervised institutions (BSIs).

According to the BSP, the proposed model is designed to be a dynamic, forward-looking tool rather than a static auditing process.

“FCPRISM supports a holistic and forward-looking supervisory assessment of a BSI’s capacity to safeguard consumer rights and deliver fair consumer outcomes in a consistent and sustainable manner,” the BSP said in a draft rule, which is open for industry feedback until July 10.

By moving away from a traditional, one-size-fits-all oversight style, the BSP aims to ensure that its “supervisory attention remains proportionately focused on institutions with greater potential to cause consumer harm.”

Consumer harm, as defined by the central bank, covers both financial and non-financial adverse outcomes. These include financial losses, unfair or discriminatory treatment, unjustified exclusion, poor value for money, unexpected or undisclosed costs, and an inadequate understanding of financial products and services.

Under the proposal, the BSP has established a clear timeline for the transition, noting that the model “shall guide all financial consumer protection supervisory assessments effective Jan. 1, 2027.”

While the framework is intended for broad application, its initial rollout will target the highest-traffic retail sectors. “Initially, FCPRISM shall only apply to banks and non-bank electronic money issuers. Over time, the FCPRISM shall be proportionately applied to all BSIs,” the BSP said.

To enforce the proposed standards, the BSP will introduce a four-point overall consumer protection (CP) stance rating system, which classifies BSIs from “consumer-centric” to “consumer-harm evident.” Institutions receiving the lowest rating are those with systemic weaknesses where consumer harm is “occurring or likely to persist.”

Monitoring will also shift from periodic to continuous through complaints-based surveillance. This involves the ongoing analysis of consumer complaints and redress data.

According to the BSP, this approach will help determine whether corrective actions are translating into measurable improvements in consumer outcomes while ensuring that financial institutions remain accountable.