Bangko Sentral ng Pilipinas Governor Benjamin Diokno on Tuesday said the regulator will soon come up with a policy on the establishment of digital banks in the country.
Diokno, in a speech during the ING Bank Pay Account virtual launch, said digitalization was the way to go, especially during the current health crisis where more people preferred to do online rather than personal transactions to avoid COVID-19 infection.
“Recognizing that digital payment services are increasingly becoming indispensable in our daily lives, the Bangko Sentral embraces a governance approach where innovation is encouraged while the accompanying risks are effectively managed,” Diokno said.
“Our recent proactive policy initiative involves the establishment of a digital bank as a bank classification that is distinct from the existing universal, commercial, thrift, rural, cooperative and Islamic bank categories. This policy which is now on its final review stage is set to be issued soon,” Diokno said.
Earlier, Diokno said digital banks would be instrumental in boosting financial inclusion and electronic transactions in the country.
He said digital banks were expected to play a key role in promoting market efficiencies and expanding the access of Filipinos to a broad range of financial services.
Under its BSP’s three-year digital payments transformation roadmap, the central bank will be introducing digital banks as a distinct bank classification.
Diokno said digital banks could help address the frequently cited constraints to delivering financial services to the unbanked and underserved sectors.
He said licensing digital banks would bring the BSP closer to its goal of shifting at least 50 percent of retail payment transactions to digital channels and ensuring 70 percent of Filipino adults have transactional accounts by year 2023.
But Diokno said since digital banks were exposed to the same risks as other types of banks, they would be required to adhere to similar corporate governance and risk management standards commensurate to their business model and risk profile.
Digital banking applicants are also expected to have robust, secure and resilient technology infrastructure, effective data management strategy and practices and sound digital governance.
Diokno said ING’s Pay Account was a welcome product in this age where people need to cope with a fast-paced environment. ING Pay Account offers multi services that suit people’s need for quick and convenient means of settling bills, transferring funds and paying purchases.
He said ING’s latest initiative was perfectly aligned with the BSP’s Digital Payments Transformation Roadmap for the period 2020 to 2023 that aims to achieve an efficient, safe, and inclusive payments ecosystem.