Fintech firms hatch data-sharing system to fight fraud

“We are now in serious discussion about that in the industry,” Villanueva told reporters.

“You have to come up with rules because there should be reciprocity,” he added. “If you share [information], you can also access [data] and vice versa.”

The proposal comes at a time when financial institutions like banks are increasing their exposure to higher-margin but higher-risk retail segment amid falling interest rates.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that outstanding retail loans of big banks had surged by 23.5 percent to P1.82 trillion in September. These accounted for 13 percent of the total, with credit card receivables rising by nearly 30 percent to P1.09 trillion.

Greater financial inclusion also explains the rise in consumer loans, as lenders continue to strive to offer affordable products to gain market share. Still, experts believe lenders are facing twin pressures at the moment: protecting margins in a low-rate environment while managing credit risks.

To attract more customers and gain public trust, the BSP and regulated financial firms are beefing up their defenses against fraud. Last year, President Marcos signed Republic Act No. 12010 or the Anti-Financial Account Scamming Act (Afasa) in a bid to combat financial cybercrimes. INQ

Afasa prohibits and punishes crimes like acting as money mules to carry out scams, as well as performing social engineering schemes and economic sabotage.

The law also gives the BSP limited authority to investigate bank deposits, e-wallets and other financial accounts involved in such crimes. At the same time, it imposes responsibilities on regulated entities to employ adequate risk and fraud management systems to ensure that their clients’ financial accounts are protected.

“What we’re saying is, these emerging technologies could be used for good,” Villanueva said. “But the thing is, the bad actors can utilize it much faster.”