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In 2017, the BSP issued the appropriate prudential guidelines on mitigating technology-related risks, including anti-money laundering/combating the financing of terrorism (AML/CFT) concerns related with the use of fintech. These include the issuance of guidelines on virtual currency (VC) exchanges which facilitate the conversion or exchange of fiat currency to VC or vice versa; social media risk management which advocates responsible use by BSFIs of social media; and business continuity management which incorporates cyber-resilience in the BSFI’s business continuity planning process to adequately capture the potential impact of cyber events. Practical guidelines were also issued on the adoption of multi-factor authentication (MFA) measures for high-risk transactions and sensitive communications in response to rising cyber-attacks and threats involving fund transfers, payments and card-not-present (CNP) transactions.

Parallel to this, the BSP is monitoring other fintech activities by emerging market players such as industry developments on crowdfunding and peer-to-peer lending to determine if regulatory action is necessary.

Recently, the BSP established a unit dedicated to studying cybersecurity threat and tasked to enhance regulatory policy framework and to institutionalize cybersecurity due diligence within the financial industry. Similarly, the BSP has approved in May 2018 the creation of a regulatory subsector to serve as primary contact point of the BSP for fintech firms.

Recognizing the cross-border nature of digital services, the BSP also strengthens multi-sectoral and regional collaborative engagements with relevant stakeholders to boost the financial system’s cyber-posture and resilience. At present, the BSP is part of information sharing fora, in both domestic and international fronts, on various topics such as technology risk management, innovation, payment systems and cybersecurity.

Moreover, the BSP closely coordinates with its foreign counterpart regulators for benchmarking and knowledge exchange with particular focus on fintech. In November 2017, the BSP and the Monetary Authority of Singapore (MAS) entered into a Fintech Cooperation Agreement which enables both regulators to refer capable fintech firms, share emerging fintech trends and developments, and facilitate work on fintech projects together.

Indeed, both financial institutions and regulators must know how to keep pace and ride the waves of technological innovations to thrive and survive in this increasingly digital environment. On the part of the BSP, remains committed in monitoring fintech developments to ensure the stability of the banking system and to preserve the trust and confidence of the banking public. The appropriate gameplan is to design and implement clear and appropriate fintech policies and framework which are the important catalysts to innovation and opportunities inherent in fintech to successfully navigate the future.