Digitization of Financial Ecosystem
The AFI Network

• Founded in September 2008, AFI is a global network of policymakers in
emerging and developing countries...
Financial Inclusion Policy Trends
1.

Technological innovation to reduce cost of delivery and
increase access on a large s...
The Philippine Experience
• A state wherein there is effective access to a wide range of
financial services for all Filipi...
The Philippine Experience
• Access to financial services empowers the poor to manage their
finances and reduce their vulne...
The Philippine Experience
Applicable Laws/Regulations
Distribution Network
AML Compliance
Consumer Protection

Risk Manage...
The Philippine Experience

Electronically
stored in an
instrument or
device

Money

Issued against
receipt of funds of
an ...
Philippine Vision for Digitization
of Financial Ecosystem
Utility Bills Payment
ACCREDITE
D REMCO
OUTLET

Purchase
of Good...
The Philippine Experience
BSP CIRCULAR 704 – Electronic Money Network
Service Providers (EMNSP)
Smaller banks aiming to be...
The Philippine Experience

RBAP/MABS - GCash Mobile Banking Service

• Txt-a-Payment
• Txt-a-Deposit
• Txt-a-Withdrawal
• ...
The Philippine Experience
Rationale: technological innovation to reduce cost of delivery and
expand access and usage on a ...
The Philippine Experience

Proportionate Regulations
•
•
•
•

Allows non-banks to be e-money issuers
Allows cash-in/cash-o...
The Philippine Experience
Wider Range of Products
 Microenterprise Loans, Micro-deposits ,
Microinsurance, Micro-agri Loa...
The Philippine Experience
Impact of Digitization on Domestic Remittance Transactions

• Increased competition that results...
Thank You!
www.bsp.gov.ph

Bringing smart policies to life
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Digitizing the financial ecosystem policies that encourage digital transactions

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Digitizing the financial ecosystem policies that encourage digital transactions

  1. 1. Digitization of Financial Ecosystem
  2. 2. The AFI Network • Founded in September 2008, AFI is a global network of policymakers in emerging and developing countries • AFI is dedicated to accelerating the adoption of innovative financial inclusion policy solutions with the ultimate aim of making formal financial services more accessible and useable to the billions of unbanked people • AFI provides members with the tools and resources to share, develop and implement their knowledge of cutting-edge policies Bringing smart policies to life
  3. 3. Financial Inclusion Policy Trends 1. Technological innovation to reduce cost of delivery and increase access on a large scale (Banking Beyond Branches) 2. Proportionate financial sector policy and regulation is critical enabling factor (Proportionate Regulation) 3. Quality aspects of financial Inclusion (Consumer Protection) 4. Increased importance of data to make informed policy decisions (FI Indicators) 5. Coordinated national strategies for financial inclusion (National Strategies) Bringing smart policies to life
  4. 4. The Philippine Experience • A state wherein there is effective access to a wide range of financial services for all Filipinos “Effective access” - financial services are appropriately designed, of good quality, relevant for actual use, and beneficial to the target market “Wide range of financial services” - full set of basic services (savings, credit, payments or remittance, insurance) for different market segments, especially the unbanked Bringing smart policies to life
  5. 5. The Philippine Experience • Access to financial services empowers the poor to manage their finances and reduce their vulnerability to financial distress, debt and poverty • Inclusive finance supports broad-based economic development that can contribute to inclusive growth in the country • Illustrative example: microfinance loans Small amounts Simple requirements Typically unsecured LENDS PAYS Provides other services (e.g., deposit, insurance) aside from loans Frequent amortizations Payment based on cash flow and client capacity to pay money into business profit increase in household income improved quality of life Bringing smart policies to life
  6. 6. The Philippine Experience Applicable Laws/Regulations Distribution Network AML Compliance Consumer Protection Risk Management Process Capacity Building Bringing smart policies to life
  7. 7. The Philippine Experience Electronically stored in an instrument or device Money Issued against receipt of funds of an amount not lesser in value than the monetary value issued Accepted as a means of payment by persons other than the issuer E Issued in accordance with BSP Circular No. 649 dated 9 March 2009 Withdrawable in cash or cash equivalent Bringing smart policies to life
  8. 8. Philippine Vision for Digitization of Financial Ecosystem Utility Bills Payment ACCREDITE D REMCO OUTLET Purchase of Goods Remittance Banking Products - Deposits - Loans - Bills Payment Payment of Fare Payment of School Fees Person-toPerson Transfer Payment Salaries and Benefits -11h -10h -09h -08h -07h Price Stability -06h -05h -04h -03h Financial Stability -02h - +01h Payment of Taxes, Licenses, Other Government Services Efficient Payment System +02h +03h +04h +05h +06h +07h +08h +09h +10h +
  9. 9. The Philippine Experience BSP CIRCULAR 704 – Electronic Money Network Service Providers (EMNSP) Smaller banks aiming to be EMIs can engage services of EMNSP Stressed the need for Due Diligence and Continuing Operational Review Extends mobile financial services distribution thru larger network without incurring huge costs Bringing smart policies to life
  10. 10. The Philippine Experience RBAP/MABS - GCash Mobile Banking Service • Txt-a-Payment • Txt-a-Deposit • Txt-a-Withdrawal • Txt-a-Sweldo Bringing smart policies to life
  11. 11. The Philippine Experience Rationale: technological innovation to reduce cost of delivery and expand access and usage on a large scale • BPI Globe BanKO • Joint venture of Globe Telecom, Bank of PI and Ayala Corporation • Offer branchless banking via platform and cash in/cash out agents of MNO • Offer savings and insurance products Bringing smart policies to life
  12. 12. The Philippine Experience Proportionate Regulations • • • • Allows non-banks to be e-money issuers Allows cash-in/cash-out via agents Tiered KYC requirements Outsourcing of KYC to 3rd parties Bringing smart policies to life
  13. 13. The Philippine Experience Wider Range of Products  Microenterprise Loans, Micro-deposits , Microinsurance, Micro-agri Loans, Microfinance Plus, Housing Microfinance Expanded Virtual Reach  E-money Issuers  E-money Network Service Providers Policy and Regulation Expanded Physical Network  Opening of Micro-banking Offices (MBOs) Lower Barriers to Customer Acquisition  Updated Anti-Money Laundering Rules Informed and Protected Consumers Comprehensive Financial Inclusion Data Framework Enhanced Internal BSP Capacity Bringing smart policies to life
  14. 14. The Philippine Experience Impact of Digitization on Domestic Remittance Transactions • Increased competition that results to lower cost of services • Illustrative example: domestic remittance Amount for remittance: PhP 1,500 MNO Pawnshop Subsidiary Remittance Company Bank Remittance fee PhP 11 PhP 80 PhP 120 PhP 150 % of PhP 1,500 0.7 % 5% 8% 10 % Note: Costs are indicative market rates (e.g. average cost charged by at least 2 providers) Bringing smart policies to life
  15. 15. Thank You! www.bsp.gov.ph Bringing smart policies to life

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