MANILA — Tapping technological innovations can really improve financial services but a ranking Bangko Sentral ng Pilipinas (BSP) official said effective risk management should be in place to ensure a level playing field and consumer protection.
In her speech during the launch of the Digital Transformation Accelerator Program at the central bank office in Manila Thursday, BSP Deputy Governor Cyd Tuano-Amador said they continue to use financial technology to reach out to a large number of Filipinos who remain unbanked.
To date, the Philippines has a population of about 101 million, but around 47 million adults do not have bank accounts or are not part of the formal financial system.
The BSP has tapped financial technology or fintech to include more people in the formal banking system in line with the government’s inclusive growth bid.
“Through the appropriate use of fintech, frictions that have restrained individuals and households from enjoying a wide range of financial products and services are expected to be reduced,” she said.
Amador said “efficiencies and cost savings generated by the digitalization of these financial products and transactions are already being realized domestically and overseas.”
The BSP, in cooperation with the banks and other players, launched the National Retail Payments System (NRPS), which now has two automated clearing houses (ACHs) namely the batch electronic transfer credit facility called PESONet and the 24/7, real-time, low-value fund transfer facility called InstaPay.
“To encourage the development of innovative financial products and services, the BSP has also adopted a “test-and-learn” approach where innovative products and services are allowed to operate in a contained environment to better understand risks and find ways to mitigate them,” she said.
The BSP official, however, said if regulators “bear down too harshly because of the risks posed by tech innovators and innovations, then we could unduly restrict the gains that could accrue to the economy”.
“The issue therefore is one of effective risk management. Though financial innovations bring about considerable benefits, we need to be also mindful that proportionate regulations are needed to ensure strong market conduct, accountability, fair play, and consumer protection,” she said.
“We need to keep the interests of the consumers of financial products front and center of our efforts,” she added, citing the need to “walk the talk” as well as closer coordination with the private sector.
“The challenge for us is to come up with policies, instruments and programs to bring fintech innovations into the hands of more people so that they are empowered. A public that is well-integrated into the economic and financial mainstream is a powerful force for economic stability, development and progress,” she added. (PNA)
