Banking Industry Compliance Updates in Philippines: BSP Moves to API-Based Mechanisms
The Bangko Sentral ng Pilipinas (BSP) has issued a memorandum to update its regulatory reporting requirements for the banking sector, aiming to improve automation and strengthen surveillance.
Simplifying Reporting Requirements
As part of this move, the BSP is reducing 18 reporting templates and Excel files to a single XML file. Under the new submission mechanism, FRPv15 will require banks to submit reports in XML format, consolidating them into one submission format. This change eliminates the need for Excel-based submissions, which previously required 300-plus schedules with voluminous data points.
Benefits of XML-Based Reporting
- Reduces the number of schedules from 300 to a single file
- Minimizes duplicate and calculated fields, resulting in around 50,000 data points
- Improves processing time for report submissions, with validation of XML files taking less than a minute compared to about an hour previously
Migrating Prudential Reporting to API-Based Mechanisms
The new submission mechanism is part of the BSP’s initiative to migrate prudential reporting to API-based mechanisms, aimed at promoting the overall safety and soundness of the financial industry. This change enables banks to improve their data and reporting workflows while ensuring a complete audit trail of data processing and modifications made.
Opportunities for Financial Institutions
- Enhance end-to-end reporting architecture
- Improve data quality and accuracy
- Enable more efficient reporting processes
Implementation Timeline
The Philippines’ banking sector is set to undergo a parallel run starting in April, covering March 2023 quarter-end reports and month-end reports for the second quarter. Live submissions will start in June 2023, with the FRPv14.5 and covered FRP-related reports being discontinued.
Preparing for Change
Experts warn that banks must prepare themselves for this change by outsourcing expertise to third-party service providers or upgrading their systems accordingly. The transition has triggered a wave of automation requests both tactically and strategically in almost all financial institutions in the Philippines.
Future-Proof Target Operating Model
As the BSP continues to evolve its reporting requirements, Philippine banks are seeking a future-proof target operating model for overall regulatory reporting, enabling them to address changes from the BSP more effectively. XML-based reporting will allow for a more streamlined process for updating the BSP’s requirements and improving data acquisition, speed, and quality of data visualization and analytics.
Quote from Deputy Governor Chuchi Fonacier
“The transition reduces the number of schedules from 300 to a single file and minimizes duplicate and calculated fields, resulting in around 50,000 data points. The processing time for report submissions will also be improved significantly.” - Deputy Governor Chuchi Fonacier