BSP moving into regulatory technology, AI

The Bangko Sentral ng Pilipinas (BSP) is looking at using artificial intelligence as it adopts financial technology (fintech) in its regulatory and consumer protection functions.

BSP Governor Nestor Espenilla Jr. said it is venturing into regulatory technology or Regtech to address regulatory challenges in the financial services sector through innova- tive technology.

“The BSP is also adopting fintech method. Today, for example, the BSP has a pilot to be called Regtech,” he said.

Espenilla explained the BSP is pilot testing and experimenting on API (application program interface) system for its reporting process as well as the potential use of “chatbots” in handling consumer complaints.

“We are also adopting tech- nologies even as we advocate the use of technology in the financial system. We have come to realization over the years looking at the way our banking system has evolved, it becomes very strong but the brick and mortar just won’t catch it. The Philippines is an archipelago,” he said.

The BSP has received technical assistance and has tapped a technology partner to study the possibility of adopting Regtech in its operations, ac- cording to Espenilla.

“We evaluated the possibilities and our pain point is right now we want to come up with a more efficient way and more effective way to get data from reporting institutions that is why we are talking about API systems,” he said.

For consumer protection, the BSP is looking at using “chatbots” to collate the complaints filed before the regulator.

“We are getting all kinds of unstructured data by way of complaints. It is very hard to evaluate unstructured data so here we are using chatbots or artificial intelligence,” Espenilla said.

Espenilla said the system would help the BSP assess potential problems and come up with solutions.

“What we hope to do is from the mass of data there has to be a way of evaluating unstructured data to give us indications of problems that are arising,” he said.

He added the authorities could act and intervene on potential problems involving a particular financial product based on the data collated through the ‘chatbots.’

Espenilla said the BSP hopes to complete the pilot testing phase within the year.

“So it is pilot, I don’t know yet how it will end. Whether it will actually work, but it is worth the experiment,” he said.