The country’s umbrella group of financial technology (fintech) companies has thrown its support behind a legislative measure pushing the mandatory use of alternative data to democratize finance, as it calls for broader efforts to strengthen financial inclusion.

In a statement on Friday, July 31, FintechAlliance.Ph board trustee Todd Schweitzer said the proposed Open Finance and Consumer Data Empowerment Act establishes a pioneering framework that would help unlock a more consumer-centric financial services industry.

He said the measure, embodied in House Bill (HB) No. 9149, would further promote the availability of financial services to underserved populations while also improving the country’s existing financial services.

“Open finance legislation matters because it accomplishes two things at once: it directly expands financial access for consumers, and it opens new markets for industry to competitively serve customers the system has ignored,” he said.

HB 9149 is envisioned to bridge the gap between how Filipinos actually participate in the digital economy and how formal financial institutions assess their creditworthiness.

Once enacted, it would provide consumers with the legal right to authorize the transfer of their financial and transactional data, including alternative data sources such as bill payments and subscription activity covering up to 24 months, to accredited lenders and financial service providers for credit evaluation purposes.

The transaction history would give accredited lenders a basis for credit assessment, allowing them to use alternative data to gain a more complete picture of a person’s creditworthiness.

This is expected to benefit borrowers who have no bank loans, credit cards, or deposit relationships in their names.

“This bill arrives at the right moment: the digital rails and data privacy standards are in place, demand is clear, and this bill would establish a pioneering framework to unlock a more consumer-centric financial services industry,” Schweitzer said.

Furthermore, the proposed measure calls for the creation of the Consumer Data Commission (CDC) under the Office of the President (OP) to oversee the law’s implementation.

CDC would be chaired by a commissioner from the Securities and Exchange Commission (SEC) and co-led by at least a deputy governor of the Bangko Sentral ng Pilipinas (BSP).

It would also include members from the National Privacy Commission (NPC), the National Telecommunications Commission (NTC), and the antitrust watchdog Philippine Competition Commission (PCC), alongside four private-sector representatives.

CDC would be mandated to set technical and security standards for data transfers, accredit entities authorized to receive consumer data, conduct compliance audits, and enforce sanctions against violators.

It would submit an annual report to Congress on the state of consumer data rights and open finance implementation, in addition to conducting a comprehensive review of the law every two years. - Dexter Barro II