Gov’t Regulators Back Code of Ethics of FinTech Firms
By EDD K. USMAN, SDN, Twitter @edd1819, Instagram @bluestar0910, Facebook: SDN — Science, Digital & Current Affairs
ONLINE lending apps’ shaming of their borrowers have awaken the Philippines’ big-time financial technology (fintech) companies.
They woke up to a realization that they must police their own ranks with the aim to play fair and protect in the process their thousands of clients.
As a result the country’s FinTech Alliance.ph is now in the process of implementing an industry-wide Code of Ethics and Code of Conduct.
The codes are now being worked out by a technical working group (TWG), said Lito Villanueva, chairman of the alliance, “to make sure we come up with the right project.”
He said “the whole idea is to be inclusive, and also cover banks and non-banks.”
“As far as FinTech Alliance is concerned, that is the whole idea. Illegal operators (of online lending apps) are practically destroying the industry,” said Villanueva, chief innovation and inclusion officer (CIIO) of Rizal Commercial Banking Corp. (RCBC).
The Code of Ethics, he emphasized, is only “the initial step.” Villanueva said the press briefing marked the first time “we are gathered together to protect consumers from unscrupulous (lenders).”
“We have to make sure this will not affect the image of the industry. While financial inclusion is the mantra and fintech is the way forward, the name of the game is accountability.”
On Monday, September 16, government regulators gathered together with the Fintech Alliance at the headquarters of the National Privacy Commission (NPC) in the wake of the hundreds of complaints lodged by irate borrowers of online lending organizations with the privacy commission.
The NPC headed by Privacy Commissioner Raymund E. Liboro organized the gathering in collaboration with the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), and the Department of Trade and Industry (DTI).
He assured the NPC’s being “steadfast in protecting Filipino citizens in this rapidly-developing field of financial technology.”
Liboro reiterated the privacy commission’s commitment to its primary goal, which is “to ensure balance of free flow of information while protecting the privacy of all data subjects.”
The NPC, based on 689 complaints of borrowers, launched recently an investigation on several online lending apps. Another list of 2,666 similar concerns that reached the privacy commission through emails and social media posts which were not filed as formal complaints.
After the investigation the NPC recommended criminal prosecution against board members of three online lending apps “for violating sections 25, 28, 31 and 32 of the DPA (Data Privacy Act).”
“The investigation determined that their business practice specifically targets the privacy of persons, practically making a profit out of people’s fear of losing face and dignity. These unethical practices simply have no place in a civilized society and must stop,” said Liboro.
Code of Ethics and Code of Conduct adoption
If found guilty by the courts, operators of the three lending firms board members may face imprisonment of up to seven years, plus a fine of not more than Php5 million under the DPA of 2012.
At the meeting held at the Philippine International Convention Center (PICC), Pasay City, Metro Manila, the privacy commissioner described as “a milestone” the coming together of government regulators and fintech industry players “as we cast the widest net for consumer protection in tech-driven financial services.”
Liboro went on to voice the privacy commission’s “support to the institutionalization of Code of Ethics and adoption of Code of Conduct by the fintech industry. Through this, we expect fintech companies to be more prudent and responsible in processing their clients’ personal data and succeed in achieving genuine financial inclusivity for the country.”
The BSP and SEC also expressed support for the initiative of the FinTech Alliance.
On the SEC’s part, it “regards the initiative as the FinTech Alliance Philippines’ commitment to nurturing and realizing the potential of…fintech in contributing to the country’s economic and social development.”
PayMaya, a member of the alliance, also issued a statement through its president, Shailesh Baidwan.
“Financial inclusion comes hand in hand with educating and protecting our customers. As a founding member and trustee company of the FinTech Alliance.PH, PayMaya supports the adoption of an industry-wide standard of Code of Ethics and of Code of Conduct in support of consumer protection, governance, data privacy, security, and digital literacy.
“As the leading digital financial services company enabling millions of Filipino consumers and businesses, we affirm our commitment to uphold the highest standards in conducting our business.”
Villanueva said that presently the country has 124 fintech lenders inclusive of 75 mobile apps, 40 web-based, and five brick-and-mortar with technology platform.
Members of the alliance “agreed to institutionalize an industry-wide Code of Ethics and the adoption of a Code of Conduct.” (SDN)