By Karl Angelo N. Vidal
UNISYS CORP. expects open banking in the Philippines to accelerate as banks start to unlock their potential and amid the receptive behavior of Filipino clients towards new technology.
“As bankers understand what open banking can do for them and understand more about what it is and what it means, this will accelerate,” said Ian Selbie, Unisys Asia-Pacific solutions director on financial services, said in a recent chance interview. “Our research has shown consistently in the Philippines…that consumers are open to new things.”
Open banking allows financial institutions to connect with customers, merchants, and other financial institutions through the use of application programming interface (API) or a programming code that sends data between software platforms.
Mr. Selbie said open banking in the Philippines is more advanced than perceived.
“Banks (in the Philippines) consider themselves to be behind other banks in the region, but I believe it’s not showing the whole picture,” Mr. Selbie said, pertaining to a study conducted by financial technology Finastra, where the Philippines was tagged as a laggard among Asia-Pacific economies in terms of open banking readiness.
“Banks are thinking open banking is what they do in the UK or Australia where the regulator comes along and tells you to do this,” Mr. Selbie said.
“I know that banks are working with APIs, working closely with fintechs, creating ecosystems. It’s just that they don’t know or realize what they’re doing is open banking.”
He cited Ayala-led Bank of the Philippine Islands which partnered with mobile wallet GCash and online shopping website Lazada to allow clients to top up money from their bank accounts.
“This is what I call real open banking. It’s something you do to create better service for your customers and be more competitive. It’s not because the regulator told you to do,” Mr. Selbie said.
He added that open banking in the Philippines will accelerate as Filipinos trust their banks with their personal data.
In the 2019 Asia Pacific Banking Insights study of Unisys, 42% of Filipino respondents said they trust banks with their personal information, double the 21% who said they are comfortable with sharing their data with the government.
“Filipinos trust their banks. That’s something you can use to your advantage and forming partnerships,” Mr. Selbie said.
“Once the banks get aligned with that and once they realize what’s possible, this (open banking) will accelerate in a way what’s happening in Singapore, UK or Australia… I think we’ll see the banks starting to say this is actually a good thing.”