Governments and regulators have been hard at work in recent months to get the most out of the revolution happening in the financial services industry with the nascent fintech sector. Creating a regulatory sandbox, to mitigate risk and let innovation flourish, is the path they have decided to follow.
Harriett Baldwin, Economic Secretary to the Treasury, announced in April, at the 2016 Innovate Finance Global Summit in London, a fintech panel to set a strategy in the UK and a regulatory sandbox. As defined by the UK Financial Conduct Authority (FCA), a sandbox is “a ‘safe space’ in which businesses can test innovative products, services, business models and delivery mechanisms while ensuring that consumers are appropriately protected.” Companies have still a month to apply for the first cohort of the regulatory sandbox, the deadline is set for 8 July 2016. The application form and instructions on how to apply are available here.
During the same period, the Australian Securities and Investments Commission (ASIC), announced a ‘regulatory sandbox’ for Australian fintech startups, allowing firms to “manage regulatory risks during the testing stage, reducing the cost and time to market”, and with the aim to create a leading fintech innovation hub in the region. It’s now expected Australia will publish its sandbox proposal by the end of June.
Again in April, the Monetary Authority of Singapore (MAS) announced new initiatives to boost the country’s position as a global hub for the emerging financial technology sector. But it was yesterday, 6 June 2016, when MAS issued a consultation paper that can be downloaded here on proposed guidelines for a regulatory sandbox for fintech experiments., “MAS aims to provide a responsive and forward-looking regulatory approach that will enable promising FinTech innovations to develop and flourish. The sandbox will help reduce regulatory friction and provide a safer environment for FinTech experiments. We believe this will give innovations a better chance to take root.” said Jacqueline Loh, Deputy Managing Director of MAS. The public consultation closes 8 July 2016 (same deadline seen above for the UK sandbox).
Last but not least it has been the turn of France, where the Autorité des Marchés Financiers (AMF), announced the launch of its Fintech, Innovation and Competitiveness (FIC) division, operational as of 1st June 2016, with the aim to enhance the competitiveness of the Parisian financial centre and to analyse new risk and opportunities. The FIC division will coordinate as well a “fintech task force”, composed of experts from different AMF directorates, to address issues regarding technological innovation.
Are these good news for the financial technology sector? We believe so, even though we will need to see how the details pan out in the various countries, as we don’t have much information on the programs or their longer term impact. What’s really positive is that governments and financial regulators of some of the most advanced countries are showing awareness and understanding that creating an infrastructure where fintech companies and products could bloom and grow, would help significantly the efficiency of the financial sector and the economy of the country as a whole.
Originally published at news.crowdvalley.com.