When FinTech Ideas Meet BOT Regulations
The financial and banking industry is one of the most cautious industries in the world. And while business today wants to move fast, there still exists a need to be assured that any service being launched has been thoroughly scrutinised. This has led to the establishment of a framework we call “Regulatory Sandbox”, a playground for businesses to test their systems safely under the supervision and recommendations of regulators. This regulatory sandbox makes sure that the resulting systems will work efficiently, precisely, and in compliance with existing regulations.
The growth of FinTech marks a new turn in financial industry. More players are keen to innovate, and while this is encouraged, there is a need for regulators to watch them closely and carefully. Different countries have a different take on FinTech policy, but one of the techniques regulators from around 20 countries across the globe have utilised is to establish a regulatory sandbox to facilitate functionality, safety, and legal compliance test at a pace quicker than ever before. These countries include big FinTech hubs like the UK, the US, and Singapore.
In Thailand, the BOT established a regulatory sandbox in early 2017. This regulatory sandbox is open to any fresh, never-seen-before innovation with in-built safety measures that will benefit the people of Thailand. The innovations stay in the sandbox for 6 to 12 months. The process is deemed successful if they meet the criteria, and then the businesses can apply for operating licenses.
The regulatory sandbox is not just a theoretical concept. Today, we are already using some of its success cases. For example, PromptPay’s QR Code payment was launched and gained popularity last year after the company exited the regulatory sandbox. Moreover, there are projects being tested in the sandbox right now that feature some of the most exciting technologies of our time. One of these is a cross-border money transfer system based on blockchain technology.
Thailand, like many other countries, has established the regulatory sandbox to respond to and encourage growing financial technology innovations. We use the regulatory sandbox to achieve a good balance between cautious regulatory inspection and the speed that today’s businesses require. Joining the sandbox brings new standards of testing a financial system or service in a proper environment, with added benefits of receiving advice and recommendations from regulators. It is the way to go to assure both officials and consumers that financial innovations have been thoroughly assessed.
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