BSP sets up regulatory unit for fintech entities

A logo of Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is seen at their main building in Manila

The Bangko Sentral ng Pilipinas (BSP) on Wednesday said the Monetary Board approved the creation of a regulatory subsector for financial technology (fintech) companies as part of the broader goal to bring them into line as the economic landscape changes.

BSP Deputy Governor Chuchi G. Fonacier told the BusinessMirror the country’s central monetary authority seeks only to ensure a level and safe playing field for the fintech firms given their growing influence in the banking scene.

Fonacier said the new subsector will be under her department, adding one new division to the existing four. No positions have been given to the department yet.

She said the creation of the fintech subsector is part of a BSP-wide initiative to realign, recalibrate and keep in step with the evolving requirements of financial players in an increasingly digital landscape.

At the recent Asian Development Bank (ADB) annual meetings in Manila, BSP Governor Nestor A. Espenilla Jr. stressed the importance of a regulatory environment that “fosters innovation while ensuring risks are effectively managed.”

“We continuously monitor fintech developments. We espouse proportionate regulation, multi-stakeholder collaboration and consumer protection,”  Espenilla said.

“We do this because we believe that the democratization of technology enables efficiencies,” he added.

While the gains are modest, the BSP said the Philippines has posted significant milestones in allowing digital payments companies to thrive with the least bit of regulation possible.

The BSP reported, for instance, that the share of adults who used the Internet to pay bills or buy something online grew by 6.3 percentage points to 9.9 percent in 2017.

Those who made or received digital payments in the past year rose by 5.6 percentage points to 25.1 percent.

One of the current sectors looking to benefit from the rise of fintech in the country is the remittance sector.

In particular, Espenilla said transaction costs potentially could be cut in half, based on one of his recent speaking engagements.

In 2017 personal remittances to the Philippines reached $31.3 billion, or 10 percent of the country’s output or the gross domestic product (GDP) and 8.3 percent of the gross national income (GNI).

 

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