“Regulations and innovation can sound like oxymorons but it is no longer the case now.” said the UnionBank Vice Chairman, Justo Ortiz. To begin with, recognizing the role of digitization is a prominent aspect in all industries. When we are trying to understand why innovation happened in the first place, we are looking at the aspect of need for the change to happen in the long run. 

Union Bank of the Philippines hosted a digital fireside chat session with the Philippines Central Bank Governor, Dr Benjamin Diokno and the Chief FinTech Officer of Monetary Authority of Singapore, Sophnendu Mohanty. 

The conversation centralized on the “Transformational Regulatory Change to Accelerate Innovation” which was moderated by the Vice-Chairman of UnionBank, Dr Justo A. Ortiz.

The Blockchain World Is Here

In the regulatory framework specifically, highlighting topics such as National Information Document (ID) system, blockchain technology, open financing banking, and even digital currencies were being laid out on the table. The hour-long discussion specifies the need for the approach to be a reality when one deals with the future technologies of Blockchain and more. 

Regulators Can Be Catalysts 

Laws and regulations across the globe are paved through as the world respects the prominence of the whole industry as a whole. Transformation does not happen overnight, but it can only be done once the key aspect of knowing it is a need for the future. UnionBank’s transformation journey is one to be reflected upon as the change does not just happen when we want it to happen, but to the extent of realizing that the transformation is the future for all.

“The only way to handle the compliance requirements in a sustainable, effective and timely way was to digitize our processes so that we could acquire, store, access and report the data in the various cuts the regulators want to see, and that went into our strategic planning exercise,” Ortiz added.

The Future of Technology 

Amid the pandemic of Covid-19, the Central Bank Governor, Benjamin Diokno recognizes the role of technology in the economy. He further shared three key principles to implement by anyone, specifically organizations across the country to foster an innovation environment.

First and foremost, risk-based regulations are to be fair and proportionate. Secondly, active multi-stakeholder collaboration is a need. The last tip was about innovations. “It should benefit consumers, especially those who are most vulnerable and availing of financial services for the very first time.” 

We are also looking forward to the whole implementation of future technologies and digitization which can supervise activities in the system, predict the outcome as well as being assisted by Artificial Intelligence (AI). 

It was mutually agreed that open collaborations between regulators, especially in the financial sector and the FinTech players provide a flexible environment of change for the future of all. As UnionBank’s motto is to connect rural banks through the future technology of Blockchain’s network, the initiative became successful and to be looked at as an example by many.

Adaption To The New Norm

Looking at the aspect of change and transformation, we are either seeing the good or bad side of the bigger picture. Nonetheless, the pandemic has been doing so much more than just pausing some parts of our daily life activities to business operations. It further shifted the whole focus of digitization of the industry from being efficient and productive to “resilience and sustainable”, said Sophendu Mohanty.

Thus, the Covid-19 world is not all bad news after all, as it has also shown us all that future technology will be a crucial aspect as it has accelerated the digitization of all processes. Be that as it may, the post-effect of the economy is what regulators shall look into and embrace the new norm that we are set for the next couple of years or so.

Mohanty emphasized the need for National Digital Infrastructure which lays the foundation for fintech capabilities such as the National ID, e-KYC and seamless payment facilities. After all, the key aspect of digitization is noted to be the trusted data exchange at the national level. He further noted the need for a trusted data exchange at the national level.

Open Application Programming Interfaces (APIs) is a connected financial service which can be consumed and utilized by FinTechs and finance institutions. To sum up, this would be the first initial step for an open banking system which will allow more seamless data accessibility and inclusive prosperity. 

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About the author

Nurul Zamrè

Senior Content Writer

Nurul Zamrè is an ardent writer for the past 15 years of her living tenure on science & technology, agriculture, health, communities, management and more. She is also a News Anchor at RTM, a general manager of AHVN, a model, VO artist, emcee, gymnast, ballerina and a lover of everything chocolates.