The Bangko Sentral ng Pilipinas (BSP) said it has formally launched the Open Finance Framework, which aims to promote collaborative partnerships and digital transformation as key enablers towards economic resilience and financial inclusion.
The BSP said the Open Finance model assigns greater control to customers over their own data, enabling them to allow third-party providers access to their data across multiple financial products and services. This can offer both businesses and individuals better financial products and services, it said.
It also provides financial institutions the opportunity to reduce their transaction costs, as well as the ability to better tailor their products to the evolving needs of customers, according to the BSP.
“We must fully recognize the breadth and depth of Open Finance as it would entail a wide-ranging scope of activities covering a broader array of financial products and involving multiple stakeholders across the financial sector,” said BSP assistant governor Lyn I. Javier.
In establishing a more defined program for the implementation of Open Finance in the country, the BSP said it has adopted the three-year Open Finance Roadmap 2021-2024.
The roadmap outlines priority actions that would require capacity building, development, and adoption of industry-accepted standards under a test-and-learn approach, and the implementation of a robust and scalable framework that is fundamental to establishing an Open Finance ecosystem.
The members of the Open Finance Oversight Committee Transition Group (OFOC TG), participating financial institutions and third-party providers in the regulatory sandbox, and international partners from the World Bank (WB) and the International Finance Corporation (IFC) joined the BSP in the launch.
“As part of the core team that will drive this Open Finance initiative to impactful and life-changing opportunities for the ordinary Juan and Maria, all of us should mark this event with a sense of duty and responsibility to our nation and countrymen in elevating the level of financial inclusion and at the same time, maintaining the integrity of the entire financial system,” said BSP deputy governor Chuchi G. Fonacier.
IFC country manager Jean Marc Arbogast delivered the keynote address and highlighted the benefits of Open Finance to the Philippine digital economy.
“Open Finance aims to provide customers with greater choice and control over how they interact with financial institutions. It can lead to deeper and more dynamic markets, in which customers enjoy a better experience, more choices, and better access to a range of financial products and services,” Arbogast said.
He added that Open Finance can help accelerate financial inclusion by improving access to credit, improving the tools available for MSMEs to manage day-to-day finances and transactions, and alleviating the lack of digital documentation among Filipinos.