BAIPHIL fosters…
As more and more Filipinos embrace these financial technologies, there are also tremendous risks involved such as the potential for end-user to fall victim to fraud, data breach, cyber heists and identity theft. To protect their clients, local banks have to establish several safeguards to financial transactions made using certain financial technologies.
At the forefront of educating the local banking sector about good governance, safety and security compliance, and other banking regulations set by the Bangko Sentral ng Pilipinas (BSP) is the Bankers Institute of the Philippines (BAIPHIL), the long-time educational and research arm of the Philippine banking industry.
“While most banks are leveraging on the opportunities coming from technologydriven innovations in financial services, BAIPHIL has always been consistent in advocating good governance in the face of these changes. BAIPHIL continues to be the BSP’s channel in disseminating to the banks the new regulatory policies to ensure responsible adoption of fintech innovations. BAIPHIL partners with the BSP in promoting good stewardship among member banks to maintain the general safety and soundness of the banking system amid the changing and dynamic digital banking ecosytem,” says Dom Gavino Jr., incoming president of BAIPHIL and chief administrative officer at ING Bank N. V. Manila Branch. As a bank executive, he spent 24 years of his career mostly in finance, tax and regulatory compliance and operations within his company. Gavino also heads the Corporate Social Responsibility Committee of ING Bank and has been part of the education and training committee of BAIPHIL since becoming a member in 2010.
PrePPing for interoPerability
As new financial technologies grow in popularity in recent years, BAIPHIL is also coordinating with its network of innovation experts in beefing up the digital awareness of the local banking industry. That clarion call is more crucial this year as the BSP launched in December 2017 the National Retail Payment System (NRPS) to create a safe, efficient and reliable payment system that is interconnected and interoperable. Such a retail payment system presents the potential for increased efficiencies, greater opportunities for consumers and businesses and increased access to financial services.
“The main focus of the BSP right now is the interoperability of banks. It allows for any bank account owner to transfer funds from one bank to another domestically. Right now, transfer for funds only happens within the same bank. What the BSP wants is to allow such transfers to happen between different banks without visiting physical branches. This is one of the key elements of NRPS implementation to fast track the fruition of BSP’s financial inclusion strategy,” Gavino says about the reason behind the launch of NRPS.
Also included in the rollout of NRPS is the integration with the so-called non-bank e-money issuers. These include companies like Beep, PayMaya, Smart Padala, and GCash. These technology providers will have to collaborate with the local banks to ensure the safety and security of digital financial transactions and protect the banking public.
According to Gavino, the government decided to launch the NRPS to replicate what is happening in other countries, where electronic banking is already widely implemented. By 2020, BSP Gov. Nestor Espenilla, Jr. wants at least 20 percent of all bank transactions to be done electronically so that it can reach more Filipinos especially the unbanked.
Gavino further states, “We will help our member banks in providing extensive trainings in establishing the necessary safeguards for electronic banking transactions to protect consumers from instance of fraud and theft, especially now that there have been several cases of cyber heists.”
To be able to successfully adopt and implement digital services, BAIPHIL helps its member banks to prepare their workforce and build adequate financial innovation talents to ensure customer satisfaction and experience.
“Banks should have the capability and the right resources to implement digitized banking services. This entails a changed culture which can be achieved by adopting the new way of working which is popularly known as the ‘agile’ way of working,” Gavino explains.
He also added that in preparing to embrace these financial innovations, local banks would have to adopt more flexibility in the way they operate such as through the implementation of flexible work schedules, flexible workspace and flexible organization structures.
“Such practices have become commonplace in the Philippines in recent years because of the boom in the Business Process Outsourcing (BPO) industry. To be able to support cross-border interoperability and react quickly, the banks must be ready to allow great degree of flexibility in their workplace. Partnering with innovation or fintech companies can also provide the required support for financial innovations,” Gavino says.
global asPirations
Aside from educating the local banking industry about the most recent fintech innovations, BAIPHIL also aims to become a certification institute for bankers by 2023. It also aspires to become one of the best in the Asia-Pacific region, as duly recognized by the Global Banking Education Standards Board. This has been BAIPHIL’s plan as stressed by its former presidents.
As initial steps, BAIPHIL will focus on the development of certification courses to enhance the capability of the banking workforce in all levels. This will be done by capitalizing its existing network of talents on topics such as Bank Products, Operations, Finance, Compliance, Internal Audit and Risk Management and by partnering with various institutions that can help develop the course modules.
“Right now, BAIPHIL primarily provides training sessions about the newly issued BSP Circulars, tax laws and other regulatory developments. When you look at the other training institutes in Singapore, Hong Kong or Taiwan, they are moving ahead such that banks in these countries as well as the Philippines go to them for certifications. For us to provide more value to the industry, we are in the process of developing training modules as part of an accreditation program which will enable us to achieve our longterm aspiration of becoming a certifying body,” Gavino says.
To achieve this long-term vision, BAIPHIL is also focusing on strengthening its training and administrative support, considered to be the key to be able to foster stewardship within the institute. Also, BAIPHIL supports the BSP and International Finance Corporation (IFC) initiatives in promoting the adoption of Environmental, Social and Governance (ESG) Practices as part of core banking operations.
For fiscal year 2018–2019, the newly elected officers of BAIPHIL are well guided by the five-year plan that they agreed on during the strategic planning held last April and May. According to Gavino, the institute plans to form several technical working teams to conduct comprehensive study and research leading to the development of integrated and ladderized certification courses for the local banking industry.
In response to the financial innovations that are currently disrupting the financial sector, BAIPHIL will also organize banking forums and extensive training sessions on digital awareness covering financial talent development, blockchain, distributed ledger technology, cryptocurrency, cloud computing, data analytics, artificial intelligence and internet of things, among others.
To continue advocating good governance, BAIPHIL will also be focusing on training programs about risk and governance framework of the digital environment. Member banks can also expect more programs about digital governance, financial crime and cybersecurity, and risk and control standards for e-banking.
Finally, BAIPHIL for this year will also be expanding its social consciousness by venturing into CSR activities involving longterm commitment and creating more impact to selected communities. We will continue to focus on education, community engagement and environment.
BAIPHIL illustrates how education is crucial in ensuring that Filipinos embrace financial innovations without having to fall prey to the potential risks it holds. With a local banking industry that is well aware and trained in setting up safeguards for digitized financial services, more Filipinos can reap the rewards of seamless financial transactions in a digitally connected world.