MANILA – The government continues to strengthen its partnership with banks and related institutions to further improve the level of digital payments in the country.
In his speech during the Chamber of Thrift Banks (CTB) virtual convention on Tuesday, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno highlighted the importance of banks’ contribution in increasing the public’s access to improved financial services and their cooperation in the reforms towards financial inclusion.
“Thrift banks are strategically positioned to be a catalyst for financial inclusion with an extensive network of 2,744 banking offices as of end-August 2021 that are spread in different regions throughout the country,” he said.
Diokno said the country’s strong macroeconomic fundamentals and ongoing reforms can be used by the thrift banking sector in the quest to be more resilient post-pandemic.
He said the central bank, for one, has issued the Open Finance Framework that promotes consent-driven data portability, interoperability, and collaborative tie-ups among financial institutions and third-party providers.
“Through ‘permission-based’ access to customer financial information, financial institutions and third parties will gain access to financial information necessary to develop innovative products and services that are suited to the changing consumer needs,” he added.
Diokno said the central bank is also set to issue policies on outsourcing and regulatory sandbox or the “test and learn” framework that are expected to further facilitate digitalization among smaller institutions, such as thrift banks.
Another measure in the pipeline is the development of a “course on digital transformation to assist thrift banks in preparing for a digital-ready culture and environment”, he said.
Diokno also underscored the importance of the implementation of the Philippine Identification System (PhilSys) or national ID since this will not only provide Filipinos with a unique, verifiable, and biometric-based digital identity, but also increases bank account ownership.
Under the national ID program, BSP has teamed up with the state-owned Land Bank of the Philippines (Landbank) to provide applicants who do not have a bank account to open one at the same site where the biometrics for the national ID is being gathered.
Signed into law by President Rodrigo R. Duterte in August 2018, Republic Act 11055, or the Philippine Identification System Act, aims to establish a single national ID for all Filipinos and resident aliens.
The national ID shall be a valid proof of identity that shall be a means of simplifying public and private transactions, enrollment in schools, and the opening of bank accounts.
It also seeks to boost efficiency, especially in dealing with government services where people will only need to present one ID during transactions.
“The ongoing digital transformation of the Philippine economy is improving the way Filipinos make payments. For Filipino consumers, this is the first step towards accessing a wider menu of digital financial services,” Diokno said.
He said digital transformation of thrift banks’ systems, processes and services is now crucial given the rapid technological advancements.
“Thrift banks will have to evolve and consider new business strategies to keep up with the fast-changing times,” he added. (PNA)