Banks told to ‘ keep pace’ with fintech
BANKS and similar firms must “keep pace” with emerging financial technology (fintech) in the face of rising competition, the country’s central bank chief said, while ensuring that firms maintain prudence as they venture into the new field.
Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said the influx of electronic financial products stands to help broaden financial inclusion in the country, with the central bank keen on embracing such technology.
“Banking products, financial services and needs, technology and consumer preferences are always levelling up. We have to keep pace,” Mr. Espenilla said in a speech before the Bankers Institute of the Philippines on Friday. “We do this with training and education. We do this with updated and relevant regulations.”
“We at the BSP have raised the bar of prudential standards to promote resilience in the banking system and market discipline for risk-taking activities.”
The BSP chief said the central bank is bent on allowing new financial products, particularly those that make use of digital channels in the Philippines, as these are expected to help more Filipinos gain access to formal banking channels. Mr. Espenilla said the central bank has been welcoming of such innovations as it continues to update rules on corporate governance and risk management, specifically to allow fintech players to offer their services in the Philippines.
“New sophisticated players such as financial technology solution providers have entered the market. This is a good thing as these bring about a notable and gradual unbundling of the traditional value chain in the Philippines and intimately links banks closer to customers,” Mr. Espenilla said, while flagging that the concern now is on cybersecurity.
Embracing new financial products will likewise make economic growth more inclusive and “meaningful,” the BSP chief added.
The new governor said in June that the central bank is currently drafting enhanced rules on information technology, as part of a general thrust to tighten rules to guard against cyber threats.