THE country’s monetary authorities have greenlighted the open finance framework rules, which are viewed as a critical enabler for digital transformation and financial inclusion.

“The open finance framework recognizes that advances in technology will facilitate the development of bespoke products and services for every Filipino using their own consumer data,” the Bangko Sentral ng Pilipinas (BSP) said in a statement over the weekend.

Approved by the Monetary Board last June 17, the framework encourages financial institutions and financial technology companies to collaborate on data portability, interoperability, and collaborative partnerships based on consent.

Customers will be able to authorize access to their financial data, which will help to define a customer-centric product development goal.

It encompasses a wide range of financial products and institutions, including, but not limited to, banking products and services, investments, pensions and insurance.

“The BSP expects a tiered implementation of the framework based on data sensitivity, and types of data and data holder. The tiers are not necessarily sequential, and multiple implementations may occur at the same time,” the central bank added.

The first tier entails exchanging product and service information, as well as other details about financial products and services that are currently available online. The second tier involves the sharing of information about subscriptions and new account applications.

The third tier entails the exchange of account information or personal and financial data provided by a consumer. Transaction data, such as payments and other financial transactions, is covered in the fourth tier. The fifth tier includes more complex financial products and use cases that are not covered by the previous four tiers.

The BSP said the Open Finance Oversight Committee (OFOC), a body led by the industry, will oversee the activities and players in the open finance ecosystem. The Bangko Sentral will be in charge of overseeing the committee.

“The said committee is expected to promote non-discriminatory membership by ensuring that key areas of interest of the financial industry are adequately represented in the committee and that all members and applicants for membership are treated fairly and consistently,” it added.

Central bank Governor Benjamin Diokno said, “Open finance is definitely not a sprint, but a marathon. It will be a long and challenging run, but just like any other sport we need to properly prepare and condition ourselves to finish strong in this race.”

The open finance framework is one of the projects included in the central bank’s Digital Payments Transformation Roadmap, which aims to provide transaction accounts to 70 percent of Filipino adults by 2023.

“This initiative will bring us closer to our goal of promoting an inclusive and sustainable recovery and growth for the country,” Diokno added.