The Monetary Board has recently approved the amendments to the BSP’s customer due diligence (CDD) regulations, which include guidelines on electronic Know-Your-Customer (e-KYC) using digital identity (ID) system.
The new rules set out the requirements for the use of digital identification and verification as part of the customer onboarding process of BSP-supervised financial institutions (BSFIs).
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The BSP guidelines recognize the use of e-KYC through the digital ID system and provide the minimum requirements for BSFIs in the conduct of e-KYC.
In particular, the latter should be anchored on robust information and communication technology architecture and tiered or risk-based e-KYC policies and procedures with commensurate onboarding requirements and authentication assurance levels.
The enhanced rules highlight that the Philippine Identification System (PhilSys)-enabled e-KYC to be launched by the Philippine Statistics Authority (PSA) is an acceptable system for e-KYC under Republic Act No. 11055 or “The PhilSys Act and its Revised Implementing Rules and Regulations.”
A PhilSys-enabled e-KYC shall be allowed subject to PSA’s applicable guidelines and full implementation of the authentication procedures/methods and other related systems under the PhilSys.
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In a press release, BSP Governor Felipe M. Medalla stated that “The policy enhancements promote seamless remote identity verification by leveraging on the use of technology and existing e-KYC systems.”
“E-KYC is one of the key enablers to promote innovation and digital transformation aimed at advancing our financial inclusion agenda,” he added.
Based on the news guidelines, BSFIs with existing e-KYC systems are given one (1) year to comply with the prescribed e-KYC requirements.
Meanwhile, BSFIs that intend to shift to an e-KYC system are expected to comply with the provisions of the new circular before the implementation of the system