‘Stop marketing yourselves as digital banks’
LOCAL lenders should refrain from marketing themselves as fullfledged digital banks, as regulators are yet to issue the framework for such entities, according to the Bangko Sentral ng Pilipinas (BSP).
In a memorandum dated June 1, BSP Deputy Governor Chuchi Fonacier reminded BSP-supervised financial institutions (BSFIs) “to exercise caution when publicly promoting themselves as digital banks in the absence of a separate licensing framework for a fullfledged digital bank for now.”
“Pending [the] formal issuance of such a framework, BSFIs should refrain from making representations that could generate ambiguities in the current state of licensing regime for banks,” she added.
Fonacier said that as the central bank pursues the advancement of digital solutions in rendering financial services, certain BSFIs have sought to pronounce their digital capabilities by marketing themselves as “digital banks.”
She clarified that no distinct “digital banking” license has been issued by the Bangko Sentral to institutions that have pursued a digital-centric business model.
“Instead, institutions offering digital- centric financial services are either an existing universal, commercial, thrift or rural bank, or have applied either as a universal, commercial, thrift or rural bank in accordance with the existing bank licensing regime,” the BSP official noted.
Fonacier said that, instead of a unique “digital banking license type,” the central bank had laid out specific guiding rules for offering digital banking services through its Circular 1033 on Electronic
Payment and Financial Services (EPFS).
“The EPFS provides the licensing requirements [that] entities must comply with to offer payments and financial services through digital channels,” she added.
According to her, the Bangko Sentral’s newest guidance to banks does not dampen its continuing support for BSFIs that embrace digital transformation in their respective businesses, especially at this time when it matters most to stakeholders.
“In view of the potential for digital innovations to elevate the reliability and inclusivity of financial services available to Filipino consumers, the BSP remains supportive of institutions willing and capable to adopt a digital banking business model,” Fonacier said.