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New BSP chief vows greater vigilance on new technological trends

Technological innovations in the banking industry must be given focus to ensure that the Philippine banking system remains resilient.

This was stressed by Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. in his inaugural speech Monday.

Espenilla, who succeeded BSP Governor Amando M. Tetangco Jr., said “digital innovation is rapidly re-shaping financial services”, thus, the need to be in tune with the “young, upwardly mobile, (and) technology-savvy” consumers.

He said the role of social media has risen so is the importance of guarding against cybercrime “that can quickly undermine trust in our financial system.”

He, thus, stressed the need to be “more vigilant, proactive, and dynamic in responding to the needs of our diverse stakeholders.”

“As policymakers and financial supervisors, we have to be in tune with these emerging market trends and evolving client needs, including the ‘millennial’ upside of our young population. Indeed, the new frontier presents central banking with challenges that have not been there before,” he said.

Espenilla, who took his oath before Finance Secretary Carlos Dominguez III Monday, also vowed to continue to bring banking operations closer to people and ensure greater financial inclusion, financial education, and consumer protection.

“Our policy agenda is therefore geared towards a truly inclusive, strong and dynamic financial system that is fully responsive to the needs of the domestic economy in line with the Government’s medium-term development plan and the AmBisyon Natin 2040,” he said.

The BSP chief said the National Retail Payment System (NRPS), which the central bank plans to implement in the third quarter of this year, eyes to increase electronic payment usage from the current one percent to around 20 percent of total payments by 2020.

A 2013 survey by the Better-than-Cash Alliance, done in coordination with the BSP, found out that only one percent of the about 2.5 billion monthly payment transactions in the country are done through electronic means.

“A well-designed payment system serves as a key pillar of an inclusive and expansive digital finance ecosystem – one that is able to meet the diverse needs of all users in a manner that is convenient, sustainable, affordable, and reliable,” Espenilla said.

Asked for lessons the BSP has learned from the 1997 Asian financial crisis, the BSP chief told reporters that there are “lots of lessons” learned from that crisis “so we did several major reforms” such as monetary reforms.

“We implemented a slew of banking reforms and Basel reforms governance resulting in the banking sector (becoming) a strong pillar of the economy. We learned a lot of lessons and a real test of that is the recent GFC (global financial crisis) and our banking sector unaffected,” he added.