BSP highlights role of digital banking framework in financial inclusion

The Bangko Sentral ng Pilipinas (BSP) considers the digital banking framework as a key building block in promoting an enabling regulatory environment that fosters responsible innovation, promotes cyber resilience, and expands the digitalization of the financial sector in pursuit of its financial inclusion agenda.

In his speech during the SAP Virtual Roundtable recently, BSP Governor Benjamin E. Diokno said, “For the Philippines, digital banking or digital finance in general as a strategy is not so much about being ahead of the curve. It is more about capitalizing on its gains to bring about a more inclusive financial ecosystem.”

Issued in December 2020, the BSP’s “Guidelines on Establishment of Digital Banks” defines a digital bank as a financial entity, categorized as a bank, offering financial products and services that are processed end-to-end through a digital platform or electronic channels with no physical branch offering financial products and services.

Nonetheless, digital banks are expected to have sound digital governance; robust, secure and resilient technology infrastructure; and effective data management strategy and practices.

Moreover, digital banks are subject to the same prudential requirements applicable to other types of banks, including corporate governance, risk management, compliance, internal control and audit, and reporting governance.