Enhanced digitalization rules for banks to be released within the year

The Bangko Sentral ng Pilipinas (BSP) is set to issue enhanced guidelines on digitalization for banks before the end of the year, aiming to create a more level playing field across the financial sector.

Speaking at the Chamber of Thrift Banks (CTB) convention in Makati City last week, BSP Deputy Governor Chuchi Fonacier emphasized the increasing adoption of digital platforms by Philippine banks to improve services and expand their offerings.

Based on recent BSP data, Fonacier noted that 73.2% of the country’s 41 thrift banks now have electronic payment and financial services (ePFS) licenses. Of these, 48.8% offer InstaPay and 43.9% provide PESONet, the central bank’s two main electronic fund transfer services under its National Retail Payment System (NRPS).

Fonacier said the BSP is now reviewing the extent of digital operations in financial institutions to determine how regulations should be applied based on a bank’s level of digital engagement.

“This approach promotes a level playing field and ensures consistent application of regulatory requirements and expectations between digital banks and digital-centric banks,” she explained.

The proposed guidelines will include capital requirement adjustments for traditional banks that expand into digital banking services. According to Fonacier, this is necessary to reflect the greater operational and cybersecurity risks that come with digital transformation.

“The guidelines will be issued. It still is for consideration by the Monetary Board,” she said in an interview following her speech. She also clarified that no new licenses for digital banks have been issued, and the number of players in that segment remains at six.

Digital banks, as defined by the BSP, are institutions that provide financial services exclusively through digital platforms and electronic channels, with no physical branches. These banks are currently required to maintain a minimum capitalization of P1 billion.

As the local banking industry accelerates its shift toward digitalization, the BSP is taking steps to ensure regulatory parity between fully digital banks and traditional institutions adopting digital strategies.