Fostering mobile banking system through proportionate anti-money laundering regulations

• Main Author: Trinidad, Jay-Ryan M.
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Money laundering—Law and legislation—Philippines; Banks and banking, Mobile; Business Administration, Management, and Operations; Commercial Law
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6117; https://animorepository.dlsu.edu.ph/context/etd_masteral/article/13022/viewcontent/CDTG004973_P.pdf
• Institution: De La Salle University

The Philippines is determined to achieve financial inclusion by extending financial services to the unbanked portion of the populace. And with the advent of modern innovations, technology is proving itself as a good partner for the achievement of this goal. With the growing number of mobile phone subscribers, the Country’s banking and telecommunication companies have merged to form the Mobile Banking System. Now, one can easily pay transfer cash and remit money through his mobile phone. But to protect the integrity of the financial sector against the abuses of this technological novelty, the Philippine Government has enacted and implemented several laws. Among these regulations is the Anti – Money Laundering Act. The law requires covered entities, including those engaged in the delivery of Mobile Banking services, to comply with the following rules, namely; a) Know Your Client/Customer Due Diligence, b) Face – to – Face, c) Record Keeping, d) Reporting of Covered and Suspicious Transactions, and e) Trainings and Seminars for Staffs and Personnel. Previous studies suggest that some provisions of this Act, coupled with its inapt application, hamper the growth of the system. In this scenario, the clash between the concepts of financial integrity and financial inclusion is likely to occur. Hence, this study desires to determine whether the existing AML regulations provide proportionate regulatory environment to the Mobile Banking System. As conclusion, the study states that Know Your Client/Customer Due Diligence, Face – to – Face, and Record Keeping are onerous AML rules and hamper the growth of the system. On the other hand, Reporting of Transactions and Trainings and Seminars are not onerous AML rules and hence foster the growth of the System. It is the view of this Study that if the Country wishes to balance the objectives of financial inclusion and financial integrity, it must provide Anti – Money Laundering policies that inculcate the indicators of proportionate regulations mentioned in the Recommendations. Only then an enabling regulatory environment which advances the cause of Mobile Banking System can be achieved.