Government Agencies Support the use of Alternative Data to Promote Financial Inclusion
In the webinar hosted by FinTech Alliance.PH, “Optimizing Alternative Data for Inclusive Credit Access,” the Credit Information Corporation (CIC), Bangko Sentral ng Pilipinas (BSP), and the National Privacy Commission (NPC) supported the use of alternative data to provide the unbanked and underbanked with access to formal credit.
Because of a lack of data, traditional financial institutions have struggled to provide credit to the unbanked. As a result, alternative data has been viewed as a means to promote financial inclusion and extend credit to these underserved sectors. These kinds of data can provide a profile of the bower to help them build their credit.
BSP’s Director for Financial Inclusion Office, Strategic Communications and Advocacy, Ms. Ellen Joyce Suficiencia, analyzed the results of its Alternative Data Usage Survey which showed that 78% of the 146 surveyed financial institutions understand the benefit of using alternative data.
Additionally, Atty. Anna Benjieline Puzon from the NPC Compliance and Monitoring Division encouraged the adoption of risk-based proportionate approaches to prevent public mistrust.
CIC President and CEO Atty. Ben Joshua Baltazar discussed how strengthening the country’s credit registry and optimizing the use of alternative data aligned with the objectives of the Credit Information System Act (CISA). He then talked about the CIC’s membership in the Technical Working Group (TWG) for House Bill No. 7863 or the “Fair and Inclusive Credit Information and Scoring Act” and commitment to big data projects to identify gaps in traditional credit data coverage. Likewise, he divulged that the CIC was working on an open policy wherein its Special Accessing Entities (SAE) and Accessing Entities (AE) may use CIC data and other sources to generate a borrower’s credit profile. The CIC has also signed a Memorandum of Understanding (MOU) with Fintech Alliance.PH on the utilization of alternative data and integration of a credit scoring mechanism.
The full press release can be accessed here.