The Bangko Sentral ng Pilipinas (BSP) is proposing guidelines that will establish the business models and arrangements for the eventual emergence of a digital financial marketplace under the open finance environment.

BSP Governor Benjamin E. Diokno said that with the recently-issued Open Finance Framework, the BSP “foresees the emergence of new business models and arrangements which will further drive innovation in the financial sector and bring more value to customers.”

The BSP has began to circulate to banks and non-banks for comments and recommendations. Banks and non-banks are expected to submit their comments to the BSP by Feb. 16.

"The Bangko Sentral supports the adoption of a digital financial marketplace model where banks and electronic money issuers (EMIs), as ecosystem drivers, forge strategic and meaningful partnerships with other financial service providers to empower consumers and enable them to access a range of select financial products and services through a one-stop-shop platform,” said Diokno in the proposed circular.

The new circular will also be based on sound governance and risk management system, and an effective information sharing arrangement to ensure that attendant risks are adequately managed, and consumer interests are protected.

Based on the draft circular, a digital financial marketplace is digital platform or electronic channel that serves as access point for bank or EMI clients to a range of financial services offered by multiple financial service providers.

The BSP describes a digital financial marketplace model as a platform-based business model enabled by ecosystem partnerships between a universal bank, commercial bank, digital bank, or EMI and other financial service providers where the latter may use the digital marketplace owned and operated by the bank or EMI in offering select products and services to bank or EMI clients, for a fee or commission.

The BSP will recognize digital financial marketplace activities as the accreditation, regular monitoring and review of financial service providers and the products and services offered, as well as the operations and maintenance of the digital financial marketplace, and other activities related to the marketplace agreements.

The BSP last week announced that it will pilot-test three use cases for its Open Finance Framework in the second quarter this year. These are account opening, direct debit payments and fund transfers

The recently established Open Finance Oversight Committee (OFOC) and its transition group (TG) are currently conducting preparatory activities in the first three months of this year. Within the first quarter this year, the OFOC will also identify and determine areas of cooperation to enable open finance which is a model based on collaboration and data sharing through Application Programming Interfaces (API), to promote digital transformation and financial inclusion.

Basically, open finance promotes consent-driven data portability, interoperability, and collaborative partnerships among entities. It extends the principles of data sharing, security, and privacy across the different financial products.

Open finance will accelerate financial inclusion by improving access to credit and improving the tools that micro, small and medium enterprises can tap. As defined by the BSP, open finance is the extension of data sharing principles, assigning greater control to customers over their own data and enabling them to allow third party providers access to their data across multiple financial products and services.