Central bank proposes model for digital financial marketplace
THE BANGKO SENTRAL ng Pilipinas (BSP) is proposing a model for a digital financial marketplace, where various financial institutions can offer services through a one-stop platform.
A draft circular posted on the BSP’s website said banks and other financial service providers can partner for a digital financial marketplace where they can offer their products and services. The platform-based model will be operated by a bank or an electronic money issuer with fees and commissions.
The platform can be done by universal, commercial, digital banks, or electronic money issuers (EMI) and other financial service providers, the central bank said.
“Underpinning the adoption of a digital financial marketplace model are sound governance and risk management system, including an effective information sharing arrangement to ensure that attendant risks are adequately managed, and consumer interests are protected,” the BSP said in the proposed circular.
Interested financial service providers that will partner together for the digital finance marketplace shall have a combined capital of at least P1 billion in order to operate. They should also hold an Advanced Electronic Payments and Financial Services license for the digital financial marketplace platform, the central bank said in the draft.
Financial institutions that will take part in a digital financial marketplace should be licensed by regulators like the BSP, the Securities and Exchange Commission or the Insurance Commission.
Banks and EMIs looking to establish a one-stop platform will be required to submit to the central bank documents on their profile, audited financial statements for the last three years, registration or accreditation from concerned regulators, contracts between financial service providers, and marketing materials, among others.
Upon compliance with prudential and due diligence measures, financial institutions should send a notification letter to the BSP’s Technology Risk and Innovations Supervision Department and other appropriate central bank departments at least 30 days before launching their platform, according to the draft circular.
“Non-compliance with BSP regulations on consumer protection, data privacy and data protection and other consumer protection and data protection laws and regulations, shall be considered grounds for termination or non-renewal of digital financial marketplace agreements entered into with partner financial service providers,” the BSP said.
ACCREDITATION RULES NEEDED
Banks and EMIs that will establish their digital financial marketplace are expected to craft their own policies and criteria in accrediting financial service providers by looking into their reputation, financial performance, operations and internal control, consumer assistance mechanism, anti-money laundering and counter-terrorism financing measures, and compliance to applicable laws and supervisory expectations.
Concerned stakeholders can send their feedback on the proposal to the BSP until Feb. 16.
The BSP said the digital financial marketplace model complements the earlier released open finance framework, which allows for customer-consented data sharing among financial institutions in bringing services to consumers. — Luz Wendy T. Noble
