BSP Mandates National ID Integration in Banks for Financial Inclusion and Digitalization

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) plans to require banks to integrate the National ID Authentication Services (Nidas) into their digital customer identification and verification processes, as part of a broader push to expand National ID use across the financial system and advance financial inclusion and digitalization. Developed by the Philippine Statistics Authority, Nidas verifies identities using facial recognition, fingerprint scans and other credentials, including the National ID number. It aims to strengthen security and reduce fraud in financial transactions. READ: BSP OKs digital identification, verification of bank clients Under a draft memorandum released for industry consultation, the BSP said integrating Nidas will allow banks and other BSP-supervised financial institutions to conduct more accurate, secure and efficient identity verification, reinforcing know-your-customer (KYC) processes. At a minimum, the BSP requires NIDAS authentication in customer onboarding, account opening and risk-based updates of customer information. However, the requirement does not prevent banks from adopting a risk-based approach to customer identification. Financial institutions may still rely on other valid IDs and verification methods when a customer does not present a National ID or when NIDAS is unavailable. Meanwhile, the central bank proposed a phased rollout, prioritizing institutions with large retail customer bases and digital onboarding operations. Under the proposal, these institutions must integrate NIDAS within three months of the memorandum’s issuance. READ: BSP to require banks to adopt strong biometrics authentication All other universal and commercial banks, as well as thrift, rural and cooperative banks, operators of payment systems performing know-your-customer or know-your-merchant functions, and other BSP-supervised institutions, will have up to six months to comply. “Through this initiative, the BSP aims to advance the secure and broader adoption of the National ID across the financial sector while supporting financial inclusion, digitalization, and financial integrity objectives,” the memo read. /pai