The Bangko Sentral ng Pilipinas (BSP) has approved the guidelines on the Open Finance Framework, which is seen as a key enabler for digital transformation and financial inclusion in the local finance industry.
The BSP said the Open Finance Framework recognizes that advances in technology will facilitate the development of customized products and services for every Filipino using their own consumer data.
“Open Finance is definitely not a sprint but a marathon. It will be a long and challenging run, but just like any other sport we need to properly prepare and condition ourselves to finish strong in this race,” said BSP governor Benjamin E. Diokno.
The issuance of the Open Finance Framework is one of the initiatives under the BSP’s Digital Payments Transformation Roadmap, which targets to have 70 percent of Filipino adults with transaction accounts by 2023.
“This initiative will bring us closer to our goal of promoting an inclusive and sustainable recovery and growth for the country,” Diokno added.
The Open Finance Framework promotes consent-driven data portability, interoperability, and collaborative partnerships between financial institutions and fintech players, according to the BSP.
Under the framework, consumers will have the power to grant access to their financial data that will shape a customer-centric product development objective. It covers different financial institutions and a broad array of financial products such as banking products and services, investments, pensions, and insurance.
The BSP said it expects a tiered implementation of the framework based on data sensitivity, and types of data and data holder.
The tiers are not necessarily sequential, and multiple implementations may occur at the same time:
- The first tier involves sharing of product and service information and other details of financial products/services that are already readily accessible online
- The second tier involves sharing of subscription and new account applications information
- The third tier involves sharing of account information or personal and financial information provided by a customer
- The fourth tier covers transactions data, such as payments and other financial transactions data
- The fifth tier covers those not covered by tiers 1-4 and other more complex financial products or use cases
An industry-led body, called the Open Finance Oversight Committee (OFOC), will exercise governance on the activities and participants of the Open Finance ecosystem. The OFOC will be under the supervision of the BSP.
The committee is expected to promote non-discriminatory membership by ensuring that key areas of interest of the financial industry are adequately represented in the committee and that all members and applicants for membership are treated fairly and consistently.
The OFOC will also be informed by the results of an industry survey conducted by the BSP, consultations with global subject matter experts, and comparative study of regulatory landscape in other jurisdictions.