New advocates have arisen as the nation moves toward a digital economy, positioning Open Finance as a vital pillar that can bring financial inclusion to millions of Filipinos. During a virtual stakeholder meeting and thanksgiving celebration organized by World Fintech Festival (WFF), Digital Pilipinas Movement, and Fintech Philippines Association, leaders from government, banking, fintech, and insurance explored how they might empower the underserved and underbanked (FPH).
Wick Veloso, President of Philippine National Bank (PNB) and Philippine Bankers Association (PBA), stressed customer-centricity as a guiding principle of Open Finance to “allow banks and other financial providers to better serve their customers.” Jojo Malolos, President of digital bank GOTyme, affirmed the utmost importance of giving opportunities to each customer: “We have to be serious in penetrating the base of the pyramid, the unbanked, and really bank them … Imagine giving loans to farmers by just … getting their consent to give out their data, you will be able to craft loans specifically for their needs.”
Edison Tsai, Partner and Executive Director of SeedIn Technology, explained major benefits of Open Finance: “The first result is that it empowers consumers” by giving them better control over their financial data. Second, “it allows financial providers or third-party providers to better create solutions and services that are more catered to consumer needs.”
Concerns about consumer data privacy and security, on the other hand, are constantly at the forefront of discussions about Open Finance, which allows banks and other organizations to share customer data with third-party suppliers. In this atmosphere, Veloso emphasized that information should only be shared with the customers’ agreement since they are the owners of their personal and financial data.
Commissioner Raymund Liboro of the National Privacy Commission (NPC) also emphasized that protecting their data privacy can strengthen consumers’ trust in companies. He said, “Our role, really is to promote trust,” placing importance on the sim card registration. He continues as “this will play a big role in ensuring that digital finance, open finance, and banking, will be relied more on trustworthy tools and implements.” He emphasized that should organizations succeed in obtaining trust, companies will flourish, creating jobs and opportunities that will lead to a more robust market. Dan Wolbert, VISA Philippines Country Manager, named the critical areas of data that should receive the most focus: “transparency to the data they are sharing; transparency on who might use that data; [the] purposes that data may be used and however long … and [that] they manage their data preference.”
Todd Schweitzer, CEO of Brankas, spoke on one of the panels and highlighted that it is the “technology, products, and rules that allow clients to safely access financial services from third-party providers.” They have control over how and where they access it, as well as who they share their data with.” Financial services may combine their goods to become building blocks for Open Finance thanks to the decoupling of the financial service provider from its access point.
Others spoke about how they were able to expand into Open Banking. Noel Santiago, Chief Digital Officer of the Bank of the Philippine Islands (BPI), remarked that their first attempts to induce people to top up their toll fee wallets had “almost zero transaction activity back in 2018.” Soon after, the pandemic-driven adoption topped 300,000 transactions per day, resulting in a customer-beneficial synergistic system with banks.
The epidemic, according to Lawrence Ferrer, President of Bayad Center, was a game-changer in the company’s ongoing integration of Open Finance with its payment systems. “There was a major movement toward going online,” he said. One of the things I was directly responsible for was the development of various digital solutions for our clients.” Their analysis revealed that their consumers’ top objectives were bill payment and loan repayment.
The Open Finance Oversight Committee (OFOC), a Bangko Sentral ng Pilipinas-led effort backed by the World Bank and the International Finance Corporation (IFC), has the potential to speed up the development of Open Finance. “The transition group,” according to Gorriceta Law Managing Partner Atty. Mark Gorriceta, “would lead the execution of initiatory and transition-related actions connected to the development of a formal organization.” [It will also] develop policy in the area of open finance.”
As Director of Open Banking Exchange Asia, Schweitzer said that the Philippines is pursuing a “balanced approach to Open Finance,” with the BSP, via the OFOC, “providing recommendations on fundamental technical operating criteria” while remaining technology agnostic to allow for innovation. Open Finance and the OFOC, he said, “promote financial institutions and technology service providers to be ahead of the curve” by participating in industry pilots and sandboxes.
“Open Finance and its technologies are ultimately about offering more services to consumers, particularly those who seldom have access to them,” he said, looking forward to the cooperation among leaders that might emerge out of the celebration as the new year approaches. Financial inclusion can and will help our country progress.”
Fintech, described by Amor Maclang, Digital Pilipinas Convenor and FPH Executive Director, as “not a vertical but a horizontal that powers various firms while building a fluid interface across sectors,” is also laying the framework for the Open Finance revolution. The Digital Pilipinas movement encourages the use of technology to solve major national issues and raise living conditions in the Philippines.
