The Payments and Settlements Department of the Central Bank of Sri Lanka is looking to set up a FinTech regulatory sandbox.
With the rapid growth in Financial Technology (FinTech) innovations in the country, the banks said it has identified the need to provide an environment that ‘nurtures and promotes their advancement’ whilst maintaining appropriate regulatory standards.
“Accordingly, the Central Bank aims to establish a Sri Lankan FinTech Regulatory Sandbox with the objective to encourage and enable FinTech initiatives that promote efficiency and increase access to financial products and services,” it said in a statement.
Its sandbox will provide “a safe space in a controlled environment” for selected firms to test their products and services, without the risk of infringing on regulatory requirements. The regulator hopes it will help create “robust and sustainable” innovations resulting in more efficient financial intermediation, greater financial inclusion, and “a less-cash society through digitalisation”.
The Central Bank is in the process of determining the scope of the Regulatory Sandbox. To ensure that it will be beneficial for Sri Lankan FinTech innovators and start-ups, it is adopting a ‘participatory approach’ to engage stakeholders in order to identify market requirements.
It is calling on ‘all relevant stakeholders’ involved in FinTech innovations at entrepreneurial, academic, investor, government, non-government and multi-lateral agency levels, including banks, and non-bank financial institutions and incorporated entities to share their views on this initiative.
In March, Sri Lanka’s largest bank, Bank of Ceylon (BOC), partnered with CustomerXP to implement its anti-money laundering (AML) solution. As part of its enterprise financial crime risk management strategy, the bank chose CustomerXPs’ Clari5 AML solution for combating money laundering threats in real-time.
Sandboxes have popping up all over the globe, with countries keen to fuel FinTech innovation in a controlled environment.
Australian startup ID Exchange and UK-based firm digi.me recently partnered to establish a commercial RegTech sandbox facility. The two companies established an Innovation Campus at Glenwood in the Norwest region of Sydney, which is designed to stimulate digital innovation and economic growth, primarily focused on application development in the FinTech and RegTech sectors.
India’s central Government has also set up a special committee to look into making regulations for FinTech more flexible. As part of this initiative, it will also examine the regulatory environment for the country’s FinTecch industry, with a view of creating a regulatory sandbox.
The Financial Conduct Authority (FCA) also recently eyed the creation of a global FinTech sandbox. Launched in 2016, its sandbox has supported 60 firms in the UK to test their ideas with real customers in the live market under controlled conditions. At the moment it is also allowing firms to conduct tests in the UK. However, with ‘as many aspects of financial markets and FinTech are global’ it is looking for vies on the merits of global sandbox.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst