By Melissa Luz T. Lopez
Senior Reporter
THE CENTRAL BANK is looking to roll out digital tools within the year to tighten its watch on the banking sector, an official said, having sought the help of a global network for the service.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said last week that they are eyeing to employ regulatory and supervisory technology (RegTech), which comes at a time of increased activity in the digital space.
Ms. Fonacier said the BSP has partnered with the RegTech for Regulators Accelerator (R2A), a global initiative that provides technical assistance for financial sector regulators to “develop and test the next generation of digital supervision tools and techniques.”
The R2A engages regulators to build capacities and employ new supervisory tools within a 20-month period. Apart from the BSP, the R2A is also providing aid to regulators in Mexico and Ghana in terms of using financial technology (fintech) solutions or enhanced oversight of their respective financial markets.
“Currently, the BSP is exploring two RegTech solutions for implementation within the year,” Ms. Fonacier said in an e-mail interview.
BSP Governor Nestor A. Espenilla, Jr. said last year that the central bank is testing two platforms that make use of artificial intelligence for the conduct of bank supervision, which include the collection of industry data by way of electronic submissions as well as chat bots to process consumer complaints.
Ms. Fonacier provided more details, noting that an Application Programming Interface (API) will allow financial service providers to connect directly with the BSP for data sharing. Meanwhile, chatbots will automate the handling of complaints from the public which are sent via text message and online platforms.
“By improving data quality and access and developing new tools for data visualization and analysis, R2A will help the BSP implement a risk-based supervisory approach that reduces compliance costs and promotes financial inclusion while ensuring financial stability and integrity,” according to the R2A project description on its Web site.
“Moreover, the BSP will be able to capture crisper insights on the Filipino financial sector that will be used to develop policies such as the financial inclusion strategy.”
The R2A is funded by the United States Agency for International Development, Bill and Melinda Gates Foundation, and Omidyar Network, Ms. Fonacier added.
The shift to fintech-based regulatory tools come as the BSP pushes for increased use of electronic payment platforms, as captured by the National Retail Payment System project which kicked off in 2015.
The central bank targets to lift the share of digital payments to 20% of total transactions by 2020, coming from a measly 1% recorded in 2013.
Reuters reported on Saturday that the BSP alerted local banks to be “extra careful” following a foiled cyber attack at the Bank Negara Malaysia, where hackers tried to steal money using fake wire transfer requests sent to the foreign central bank.
The scheme sought to mimic the attack on the Bangladesh central bank in 2016, where $81 million was stolen by still-unidentified hackers which were transferred to a Philippine bank and local casinos before they were pocketed by thieves.

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