Online banking in the Philippines may have hit a hump following reports that the Bangko Sentral ng Pilipinas (BSP) has suspended applications for e-banking. The reports, unconfirmed as this issue went to press, were discussed during a meeting of the Information Technology and E-Commerce Council (ITECC) late last month. The consensus at that meeting was that any move in this direction would go against the spirit of the E-Commerce Act.
"If it's true, then it's going to be a big blow to e-commerce, so now is a good time to prepare our position papers and exhibits," said Trade and Industry Secretary Manuel Roxas II, who told the group that he would try to reach BSP Governor Rafael Buenaventura, who was attending a meeting of the International Monetary Fund (IMF) in Prague, Czech Republic.
The secretary also directed the ITECC secretariat to form a task force with strong private sector representation to look into the matter.
Based on the ITECC discussions last month, it seems that the BSP is being overtaken by developments in online banking, even before it can finish the implementing rules and regulations (IRR) to govern it. In this regard, the ITECC task force will try to assist the BSP in finishing its IRR.
"In my conversations with the leadership of BSP, they are very conceptually supportive of the program (online banking) but I think they are basically afraid that the horse will run away from them. So we need to show them they can still continue to have their fingers on the pulse of the financial system even if we do this," Roxas said.
Meanwhile, Assistant Secretary Toby Monsod of the Department of Trade and Industry (DTI) said they already touched base with the BSP's CIO Teresita Hatta, and that the reports "may not be as alarming as they sound."
Monsod said it should be noted that the BSP agreed to lead the regional electronic payment settlements committee for the e-ASEAN Working Group, so it would be inconsistent for the Central Bank to pull back now on online banking.
During the course of the discussions, ITECC officers also learned that a BSP circular has asked banks to stop advertising their online services. This was subsequently confirmed by one bank that is heavily involved in e-banking. The same bank official, who requested anonymity, told Computerworld Philippines, however, that there is no suspension per se on virtual banking applications in the country.
ITECC officers and members said the BSP is probably wary about security issues concerning e-banking. Augusto Lagman, who is an active industry representative, suggested that banks implementing e-banking should present their security features to the BSP. Another member of the council said security is an issue that the BSP must confront, depending on each bank's assessment of acceptable risks. "Right now there's really no common standard and benchmark per se," the council member said.
Roxas also acknowledged the fact that, unlike with automated teller machine (ATM) transactions, where there is a limited downside (whatever money is in the machine), an e-bank can theoretically open up unlimited resources to the cyber user.