ANTICIPATING the growth of virtual banking, the Cebu Bankers Club (CBC) said there needs to be a law regulating it.
Virtual banking is a system where all banking transactions are done online. Online banking, on the other hand, is the web-based option offered by traditional banks to their clients.
“It is one thing that we should look into that there should be a law regulating virtual banking because it could also be abused,” said CBC president Neil Yu.
On Monday, Jan. 6, 2020, Albay Rep. Jose Maria Clemente Salceda of Albay filed House Bill (HB) 5913 or “An Act Providing for a Basic Regulatory Framework for Virtual Banking and other Purposes,” which if passed will be known as the Virtual Banking Act of 2020.
Salceda said the measure aims to prepare the country for the entry of more players in the virtual banking industry.
In a report, Salceda said virtual banks are able to provide financial services at much more favorable rates, as they do not incur such expenses as establishing and securing branches and maintaining automated teller machines.
“The opportunity for regulation is clearly now, when the industry is yet to go in full swing,” said Salceda.
Key pillars
The lawmaker said the bill proposes four key pillars to a virtual banking sector in the country.
The bill seeks to encourage virtual banking as a means to improve financial inclusion and to promote the development of financial technology.
It provides a clear, coherent and far-sighted regulatory framework for virtual banks, while also granting adequate latitude to the Bangko Sentral ng Pilipinas. The bill also auctions license to qualified virtual banking applicants to ensure that the state and the public receive the highest benefits from their applications.
The measure also provides operations and management rules that levels the playing field to ensure that virtual banking can become a fair, sustainably developing and profitable industry.
It also outlines a framework for consumer protection in virtual banks, including deposit insurance and protection against unauthorized transactions.
For online banking, Yu assured banks are investing on consumer protection, especially against online hackers.
“We are always conducting information awareness among our clients regarding phishing and how they can avoid giving their personal information to unscrupulous persons,” he said.
Yu said the public should be on the lookout for phishing attacks and must secure their online accounts by using strong passwords and changing them regularly.
Rise in online payments
The Bangko Sentral ng Pilipinas (BSP) earlier reported a 20 percent increase in the usage and value of online payments through the years since 2013.
“In 2013, we only had one percent e-payments usage; in 2018, we had 10 percent. In terms of e-payments value, in 2013, it was only eight percent; in 2018, 20 percent. As you can see, both usage and value have increased, indicating that it is not only being used more frequently, but also that it is trusted with bigger values,” said BSP Gov. Benjamin Diokno, in a speech on the Digital Payments Leaders Summit press conference in Manila.
Because of this, Diokno said the country is now on the shift to using digital payments options.
“This positive development affirms that significant progress towards the shift from cash-heavy to a cash-lite economy is attainable,” he said. (JOB)