BSP issues rules for ‘Open Finance’ in digitization push

THE Bangko Sentral ng Pilipinas (BSP) has announced over the weekend that it has established the guidelines for open finance in the country. The Open Finance Framework’s main premise is consent-driven data portability, interoperability and collaborative partnerships between financial institutions and financial technology (fintech) players.

Under the framework, consumers will have the power to grant access to their financial data for a customer-centric product development objective. It covers different financial institutions and a broader array of financial products such as, but not limited to, banking products and services, investments, pensions and insurance.

The issuance of the Open Finance framework is one of the initiatives under the BSP’S Digital Payments Transformation Roadmap, which targets to have 70 percent of Filipino adults with transaction accounts by 2023.

“This initiative will bring us closer to our goal of promoting an inclusive and sustainable recovery and growth for the country,” BSP Governor Benjamin E. Diokno said.

The BSP expects a tiered implementation of the framework based on data sensitivity, and types of data and data holder. The tiers are not necessarily sequential and multiple implementations may occur at the same time.

The first tier involves sharing of product and service information and other details of financial products and/or services that are already readily accessible online.

The second tier involves sharing of subscription and new account applications information.

The third tier involves sharing of account information or personal and financial information provided by a customer.

The fourth tier covers transactions data, such as payments and other financial transactions data.

The fifth tier covers those not covered by tiers 1 to 4 and other more complex financial products or use cases.

“’Open Finance’ is definitely not a sprint but a marathon,” Diokno said. “It will be a long and challenging run, but just like any other sport we need to properly prepare and condition ourselves to finish strong in this race.”

An industry-led body, called the Open Finance Oversight Committee (OFOC) shall exercise governance on the activities and participants of the Open Finance ecosystem. The OFOC will be under the supervision of the BSP.