By Gerard de la Pena, News5
The country’s banking industry has asked regulators to tighten capital controls on fintechs and tech startups as it pushed for a more level playing field to better protect consumers’ interests and welfare in a digitalized economy.
At the sidelines of the 36th Asian Bankers Association, Jonathan Alles, chairman of the ABA, said there should be just a single regulator to oversee the operations of banks, fintechs and online lenders.
“That would be our message: how they bring all into one platform, one regulatory system, be it to through central bank or ordinate digital committee that can be brought in at a country level or a payments digital committee,” Alles said.
Currently in the Philippines, banks are under the supervision of the Bangko Sentral of the Philippines (BSP).
Fintechs and online lenders are under the watch of the Securities and Exchange Commission.
These firms are also not subjected to strict capital requirements and other regulations.
Pia Roman-Tayag, managing director at the Bangko Sentral ng Pilipinas, said the regulator is open to new modes of running the banking business brought about by digitization.
She said there is an inter-agency group, the Financial Sector Forum made up of the BSP, SEC, Insurance Commission, and other government agencies, that tackle issues surrounding fintechs.
“They lay down what are the providers’ activities that may have some overlaps so we will address any potential arbitrage there or any potential gaps that are not seen by the regulator. So that is our way to address those kinds of concerns,” Tayag said.
She also said the central bank is looking at tweaking its regulations to become much more accommodating to pure digital banks, or those that do not have physical branches such as ING and CIMB in the Philippines.
“Yun yung mga tinitingnan, mga requirements that are linked to physical networks to see how that will be translated naman if we look at digital. Kasi that will present a different set of risk areas,” she said.
“Our regulations and requirements will be based on the risks that you will take or the activities that you will provide. It will not be a shift in thinking but of course we have to review existing regulations to see how it will be applied to these new models.”
Philippine banks however recognized that despite the impending collaboration between fintechs and banks, as well as banks’ adoptation of fintech’s practices, should not result in disappearance of brick and mortar bank branches.
“People still would like to have a face and somebody to speak to even if it’s digital, even if it’s not face to face. They need someone because at the back of their mind, they know that there js somebody responsible for the money that they would like to have. So we need still to redeploy but in a different manner,” said Wick Veloso, President and CEO of the Philippine National Bank. (MM)