The new rule aimed to set out the needed requirements for the use of digital identification and verification, which represent a part of the customer onboarding process of BSP-supervised FIs.
The new electronic KYC guidelines are part of the amendments to the client due diligence (CDD) regulations, as mentioned in the article. The guidelines mention the importance of the usage of e-KYC through the digital ID system, providing the minimum requirements for banks and financial institutions in the conduct of the e-KYC.
Following the announcement of the new rule, the Philippine Statistics Authority is set to launch a PhilSys-enabled e-KYC, which will be allowed subject to the PSA’s applicable, as well as the full implementation of the authentication processes and other related systems under the PhilSys.
Banks with already existing e-KYC systems are given a period of one year in order to comply with them. Furthermore, those that intend to shift to an e-KYC system are expected to comply with all of the provisions set by the BSP before the announcement, as well as the integration of the new system.
In its `Digital Payments Transformation Roadmap 2020-2023`, the BSP aimed to focus on improving payment digitalisation in the country. The set goal was to create an efficient, inclusive, safe, and secure digital payments ecosystem. This was set to support the diverse needs, preferences, and capabilities of individuals and firms in order to archive the BDP’s mandates. The central bank envisioned two strategic outcomes from this goal.
One prioritised an improvement of customer preference for digital payments, with 50% of total retail payments shifting to digital, while increasing the number of financially included Filipino adults to 70% with the introduction of the formal financial system via payment and transaction accounts.
The Philippines Identification System (PhilSys) for KYC compliance, and next-generation payment and settlement services were also set to result in more innovative and responsive digital financial products.
At the beginning of January 2023, the Bangko Sentral Pilipinas extended the waiver of fees on fund transfers for users of its Philippine Payment and Settlement System (PhilPaSSplus).
This meant at the time that the BSP will not charge PhilPaSSplus fees until end-January 2023 after the previous suspension expired on December 30, 2022. As a part of its time-bound relief measures for banks and financial institutions during the pandemic, the BSP waived PhilPaSSplus fees since April 2022.
BSP owned and operated the PhilPaSSplus real-time gross settlement (RTGS) system. It processes and settles interbank high-value payment transactions between banks. The BSP suspended PhilPaSSplus fees on six types of transactions, including interbank, the peso-leg of US dollar trades and government securities trades, and the Philippine Clearing House Comp. (PCHC) transactions, which were automated teller machines or ATM transactions, as well as manual interbank transaction processing.
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