Philippine Central Bank Proposes Mandatory National ID Authentication for Financial Institutions

The Bangko Sentral ng Pilipinas has proposed requiring supervised financial institutions to integrate the country’s National ID Authentication Services into digital customer identification and verification.

The draft memorandum would make the service, known as NIDAS, a standard part of customer onboarding, account opening and risk-based updates to customer information. Developed by the Philippine Statistics Authority, NIDAS can verify identity through facial recognition, fingerprints, National ID numbers and related credentials held in the government system.

The central bank says direct integration would improve the accuracy, security and efficiency of identity checks while reinforcing know-your-customer controls. It would also move financial institutions away from treating a copied or photographed identity document as the only evidence available during remote onboarding.

The proposal sets a phased compliance schedule. Institutions with large retail customer bases and digital onboarding operations would be prioritized and given three months after the final memorandum is issued. Other universal and commercial banks, thrift banks, rural and cooperative banks, and covered payment-system operators would have six months.

The requirement would not prevent a risk-based approach when a person does not present a National ID or when the authentication service is unavailable. In those circumstances, a financial institution could rely on other accepted identity documents and verification methods while applying its existing customer due-diligence controls.

Several banks have already begun connecting account opening to PhilSys, the underlying Philippine Identification System. LANDBANK recently introduced an ID-free onboarding option based on PhilSys face verification, allowing eligible applicants to use a selfie match instead of uploading a card image.

National ID authentication is also supporting government services. Tayabas connected municipal transactions to NIDAS through a city-level identity authentication deployment, demonstrating how the same government service can be used by organizations outside the banking sector.

The draft would turn early financial-sector adoption into a broader regulatory requirement. Institutions performing know-your-customer or know-your-merchant functions are included, reflecting the central bank’s aim to apply trusted identity verification across account holders and commercial participants in payment systems.

The proposal is open for industry consultation before final issuance. Its stated objectives include wider National ID adoption, financial inclusion, digitalization and stronger financial integrity controls.

Sources: Philippine Daily Inquirer

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By Cass Kennedy