The use of blockchain technology in banking and finance will see a global market valued at around $95 billion by 2030, growing 63% annually over this decade thanks to opportunities stemming from the COVID-19 pandemic. 19, according to Research and Markets.
Market growth is “driven by the growing need for faster and cheaper cross-border payment systems, greater compatibility with the financial services industry ecosystem, and growing demand for comprehensive security mechanisms,” the firm said. of studies.
In the Philippines, financial sector regulators led by the Bangko Sentral ng Pilipinas (BSP) are pushing for the upskilling of banking supervisors with emerging technologies to nurture a pool of next-generation talent needed to digitize the sector.
These technologies include machine learning which helps in the automation of business processes as well as blockchain, the technology behind cryptocurrency, but most importantly the supervisory and regulatory technologies.
Blockchain, initially used as a method of accounting for Bitcoin virtual currency, is now used in different business activities.
According to ConsenSys Software Inc., blockchain can streamline banking and lending services because the technology reduces counterparty risk and decreases issuance and settlement times.
The New York-based blockchain software company explains that blockchain enables authenticated documentation and know-your-customer data, helping to reduce operational risk and enabling real-time verification of financial documents.
“The FSF (Financial Sector Forum) is committed to developing the next generation of banking supervisors with knowledge and skills on SupTech/RegTech issues,” BSP Governor Benjamin Diokno said earlier this month, referring to surveillance technology and regulatory technology.
Diokno also chairs the FSF which, along with the BSP, includes the Philippine Deposit Insurance Corp., the Securities and Exchange Commission, and the Insurance Commission.
Exploit new technologies
To that end, one of the first activities the FSF organized and conducted was a webinar that discussed how “exponential technologies” can be leveraged for the financial industry.
Diokno said the FSF, through its information exchange committee, will offer additional training programs throughout the year to facilitate a thorough understanding of the technologies by supervisors in the financial sector.
“We leverage innovative financial technologies to effectively deliver on our mandates and promote a sustainable, inclusive and resilient financial system,” he added.
In addition, the adoption of digital technologies is expected to enhance the role of Microfinance Institutions (MFIs) in bridging the financial inclusion gap in the Philippines, as MFIs are outpacing big banks in providing services to Filipinos who have access limited or non-existent to financial services.
The results of the 2019 survey on financial inclusion of the BSP show that MFIs reach 84% of the cities and villages of the archipelago.
By comparison, banks – from large universal and commercial banks to smaller savings and rural banks – are present in only two-thirds or 69% of cities.
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