PAYMENT gateway operator Xendit Philippines Inc. announced last Monday it is participating in the Open Finance Pilot of the Bangko Sentral ng Pilipinas (BSP) as both provider and user of application programming interface (API) technology.
In this capacity, Xendit is lending its startup prowess in building financial infrastructure that will facilitate the free flow of data between and among its existing partners and other stakeholders to achieve the full promise of an open finance ecosystem, the firm’s statement read. Financial institutions can also leverage this infrastructure to address issues such as process efficiency, long approval periods, online availability and overall accessibility, it added.
The firm cited the BSP as saying that “open finance will empower consumers to consent to the use of their personal and financial data to gain better access to credit and other financial products and services they can use to uplift their lives.”
“In turn, financial institutions can use this permissioned-access data to create even more customized financial products and services that address actual market needs,” the BSP was quoted by Xendit as saying. “This helps accelerate financial inclusion in the country, thus providing the unbanked, as well as micro, small, and medium enterprises, more visibility in the formal financial system.”
Xendit Product Innovation Head Jon Trinidad said through the statement that their participation in the Open Finance Pilot supports the firm’s “mission of building digital infrastructure with a network effect, one that enables other platforms and services.”
“Imagine we’re creating a toolbox, wherein anywhere you are and whoever you are, you can utilize its contents and build upon them to solve your own problems. This is how we take capacity-building to heart—by using technology to democratize services and ensure we do not leave behind the smaller financial institutions and the unbanked and underserved Filipinos,” Trinidad added.
The BSP’s Open Finance Pilot is currently ongoing and targeted to undergo evaluation by the end of the year. It features a holistic approach that covers not only the technology aspect involved in implementing open finance, but also the policies that have to be drafted to ensure its success, including but not limited to consumer’s rights and data security.
Xendit is also part of the BSP’s Open Finance Oversight Committee Transition Group, before solidifying its commitment to the initiative by volunteering to participate in the Pilot.
“Xendit is committed to advancing the BSP’s Open Finance roadmap because it will provide access to financial services to the underserved, and will build the foundations for the next frontier of financial innovations,” Xendit Compliance and Government Relations Head Guada Vergel de Dios was quoted in the statement as saying. “We believe strongly that fintech players should prioritize data security and infrastructure resilience in future-proofing the design of Open Finance initiatives so that the Philippines can set a new standard of excellence in data exchange.”
During this current phase, Xendit’s main contribution is its expertise on API design, characterized by a customer-centric approach. It has been providing insights with practical use-cases that stem from its broad understanding of local customers. On the back-end side, it prioritizes legibility to empower stakeholders to understand use-cases right away and be able to build services that provide more value for their own customers. This will also ensure that interoperability, one of the hallmarks of the open finance ecosystem, is efficiently achieved.
Notwithstanding other external variables such as access to stable internet, Xendit believes that the Philippines is getting there when it comes to readiness for an open finance ecosystem. The robust regulatory support from the central bank and its partners is a positive nudge that steers the country towards its financial inclusion vision.
It will now take strong collaboration and competition among stakeholders, and their ability to build on each other’s capabilities, to accelerate progress that is inclusive and equitable for all Filipinos.
“Moving forward, our goal is to first establish this capability and indeed prove that the ecosystem works, without sacrificing the integrity of our financial system. And then it is an iterative process, which means that we will keep finding the next pain point to address and tweak from there,” Trinidad said.