Bank of Thailand (BoT) Governor Veerathai Santiprabhob at the C asean Forum’s “Positioning Thailand’s Fintech Ecosystem” event announced more regulation for the growing fintech sector in order to protect consumers, prevent systemic risk and help the development of the market. Following the path of Governments and regulators of the UK, France, Australia and Singapore the intention is to create a regulatory sandbox that can be used as a testing ground for fintech companies.
“Fintech is a new thing for the central bank and we have limited knowledge in this area. Therefore, having the regulatory sandbox will open opportunities for product experimentation and for the companies to ramp up their scale,” said BoT Governor Veerathai Santiprabhob.
This model is tested in other countries as well, with the intention of limiting the risk for consumer and the stability of the financial system, with a framework that should not be too stringent in order to let innovation flourish. The first step in building this sandbox should be for fintech firms to register with the central bank.
Along with registration it’s expected to see other interesting initiatives to support the fintech ecosystem in Thailand. A new law, that is now pending passage by the National Legislative Assembly, called the Payment Systems Act., will cover transactions not only by banks and the other traditional financial players, but also by fintech companies and other lenders, and will make possible for businesses to verify the identities of clients. Related will be the implementation of a new payment standard, the Quick Response Code.
But that’s not all. An amendment of the the law governing the National Credit Bureau (NCB), which is now waiting for the approval from Finance Ministry of Thailand, will allow P2P lenders to become members of the agency, giving them access to consumers’ credit data for loan risk assessment as part of longer term viability of the market.
Considering the whole picture, the increased interest of governments and financial regulators is definitely positive for the financial technology industry, as it is still in its infancy and requires a good infrastructure in order to continue the significant growth seen in recent times. With Singapore and Malaysia pushing hard toward the growth of the sector, and with Thailand now quickly catching up, the outlook for fintech in Southeast Asia looks promising.
Originally published at news.crowdvalley.com.