AI, blockchain, and cybersecurity: The triple shield for the Philippine financial system

As the Philippines accelerates on its journey toward a fully digital economy, the financial sector finds itself at the center of both opportunity and risk. Consumers and businesses increasingly rely on digital banking, e-wallets, fintech apps, and online lending platforms. At the same time, the volume of transactional data, identity information, and financial activity has grown exponentially. To ensure trust, efficiency, and safety, the financial system requires a robust “triple shield” composed of artificial intelligence (AI), blockchain, and cybersecurity.

Artificial intelligence enables real-time risk scoring, optimized customer service, and fraud detection at scale. Smart algorithms can monitor behavior, flag anomalous transactions, and even detect synthetic identities before they become systemic threats.

AI-driven chatbots and virtual assistants reduce friction during onboarding and help underserved customers navigate financial products, especially for micro-, small-, and medium-sized enterprises (MSMEs) and low-income users. Under the open finance architecture of the Bangko Sentral ng Pilipinas (BSP), financial institutions will be sharing customer data — upon consent — through secure Application Programming Interfaces or APIs. AI can transform this shared data into actionable insights, from creditworthiness assessments to early warnings of financial distress. By automating compliance checks and credit scoring, institutions can onboard customers faster and more inclusively.

Blockchain, on the other hand, brings transparency, immutability, and auditability to identity and transaction records. A blockchain-enabled electronic Know Your Customer (eKYC) registry can provide a tamper-evident ledger that documents when and how an identity was verified. This does not only reduce identity fraud, it also ensures that institutions avoid redundant verification steps, cutting down operational costs and improving customer experience. Anchoring this registry to PhilSys, the national ID system, allows for each Filipino’s identity to be cryptographically validated once, with future verifications referenced via the blockchain. Customers could even retain ownership of their credentials using self-sovereign identity principles, eliminating the need to re-submit sensitive documents repeatedly.

Integrating a blockchain-based registry into the BSP’s open finance system enables seamless and secure onboarding. Banks and fintech firms can validate identity instantly, pull consented data, and provide services faster. It’s a foundation that builds interoperability across financial institutions while significantly lowering risks. Moreover, this architecture lends itself to broader innovation — from microloans and government subsidy distribution to health tech and cross-border financial inclusion.

The digital transition must be reinforced by strong cybersecurity measures. The financial sector is a prime target for sophisticated cyber threats, often powered by AI itself. Financial institutions must shift to zero-trust security models, implement multi-factor authentication, and deploy AI-powered threat modeling and monitoring systems. Blockchain’s decentralized nature also reduces single points of failure, strengthening resilience against coordinated attacks.

It is within this context that the proposed Open Finance-Enabled eKYC Registry Law becomes critical. The law aims to establish a unified, interoperable digital identity infrastructure anchored on PhilSys and fully integrated into BSP’s open finance framework. The benefits are far-reaching: frictionless customer onboarding, elimination of duplicate or fake identities, reduced fraud, and operational efficiency. When designed with blockchain, the registry can also uphold privacy and auditability, ensuring trust while enabling seamless digital engagement.

But legal frameworks alone are not enough. This national eKYC system must be built using the best available technologies, guided by global standards and local context. Blockchain provides the audit trail and cryptographic assurance necessary to secure identity records. AI provides the intelligence layer to detect fraud in real-time. Cybersecurity protects the entire infrastructure, ensuring continuity and compliance.

Public-private collaboration will be essential in operationalizing this system. Regulators including BSP, Department of Information and Communications Technology (DICT), Philippine Statistics Authority (PSA), and National Privacy Commission (NPC) must coordinate closely to establish standards for data sharing, consent management, API access, and system audits. Financial institutions must invest in their own AI, blockchain, and cyber capabilities — not only to comply, but to lead. Industry consortia can help smaller banks and fintech firms implement interoperable models. Cloud service providers and cybersecurity firms must be part of the effort, offering infrastructure and protection at scale.

Equally urgent is the need for talent. The Philippines is facing a shortfall of AI engineers, blockchain developers, and cybersecurity analysts. Universities, training institutions, and Technical Education and Skills Development Authority’s (TESDA) forward-looking EVET (Enterprise-Based Virtual Education and Training) program must be mobilized to close the gap. This is also a call to upskill displaced business process outsourcing or BPO workers — many of whom are already tech-savvy — into roles in data annotation, prompt engineering, digital trust management, and cyber operations.

The Philippines can also look outward. Countries like Nigeria have launched blockchain-based eKYC initiatives led by the private sector. India’s Aadhaar-backed stack allows financial subsidies and banking services to reach the unbanked. Estonia’s e-governance model ensures secure cross-agency data exchange while giving citizens control over their information. The Philippines can learn from these efforts and avoid common pitfalls through multi-stakeholder pilots, open-source frameworks, and robust policy dialogue.

The potential upside is national in scale. A unified, blockchain-secured eKYC infrastructure will lower barriers to financial services, unlock credit for millions, and streamline government service delivery. Fintech innovation will accelerate as the friction of customer onboarding is eliminated. Foreign investors will see a country with a resilient, transparent, and digitally mature financial system — open to innovation but grounded in trust.

The Blockchain Council of the Philippines has long advocated for the convergence of AI, blockchain, and cybersecurity as a strategic asset — not just for the financial sector, but for national development. The passage and effective implementation of the Open Finance-Enabled eKYC Registry Law is a cornerstone step in building that future.

There is urgency. Trust in the financial system must be earned and protected — especially as more Filipinos engage with digital platforms and as new threats emerge. This triple shield of AI, blockchain, and cybersecurity isn’t just technological — it is foundational. It’s the infrastructure of trust in a world where trust is increasingly digital.

We must build it together.

Dr. Donald Lim is the founding president of the Global AI Council Philippines and the Blockchain Council of the Philippines, and the founding chair of the Cybersecurity Council, whose mission is to advocate the right use of emerging technologies to propel business organizations forward. He is currently the president and COO of DITO CME Holdings Corp.