MANILA - UnionBank on Tuesday said "open banking" could attract unbanked Filipinos to join the formal financial service and boost the digital adoption in the space.
Open banking, or the way banks share select customer information with third parties particularly fintech or financial technology companies, could speed up the country's financial digital shift, UnionBank Fintech Business Group Head Erika Dizon-Go told reporters.
With open banking, UnionBank ensures that the consumers have the power to share which data they would like to share, and how long they want to share this data, among others, Go said.
To do this, consent forms when using the bank's services were simplified so consumers can easily understand what they're agreeing to compared to lengthy terms and conditions, Go added.
The bank is also "continuously improving our data security and data processes," Go said.
"We’re giving back the power of information back to the consumer. But it is up to us we do more by continuously improving our data security and data processes," she said.
With open banking, banks can share information with e-commerce sites and e-wallets companies and users do not need to have a lengthy registration with each account. It may be data on the person's shopping history or data asked during KYC or 'know your customer' portion of the onboarding process.
"Eventually that information, for example, that you've given UnionBank, has also been utilized for you, for example, to connect with your Lazada wallet or your GCash wallet. So you don't need to do it twice," she said.
When banks and these fintech companies partner, there is sharing of information, making it easier to apply for any financial service, she said.
"We don't need to have you open a bank account with us necessarily, but we can also do that via checking your online purchases, how often do you load up or top up your e-wallets," Go said.
Open banking also includes partnerships with other companies like LBC and Cebuana Lhullier, because now customers can withdraw money in remote areas where there may be no banks.
Open banking also allows companies to develop new products and services for the public because of the data shared, UnionBank said.
In a circular last year, the Bangko Sentral ng Pilipinas introduced the Open Finance Framework, which espouses consent-driven data portability, interoperability, and collaborative partnerships among financial institutions and third-party providers.
Union Bank said they have already 1 million accounts that are covered by the open banking program and they hope to double that by the end of the year.