Regulatory sandboxes vital for fintech industry, says expert
KUALA LUMPUR: Financial regulators are keen to work with industry players in enhancing regulatory sandboxes to help businesses experiment with new products and services in a safe digital environment.
KPMG Singapore’s financial services advisory practice head Chia Tek Yew said regulatory sandboxes would be a useful tool for the financial technology (fintech) industry in various sectors, such as in addressing cyber threats.
“Having regulatory sandboxes is definitely a step in the right direction.
“There are key potential benefits that the regulatory sandbox provides for both businesses and consumers.
“Banks have already introduced a regulatory sandbox framework in which financial institutions regulated by the bank and fintech companies looking to carry out businesses regulated by the bank may be granted certain regulatory flexibilities to experiment with fintech solutions in a production or live environment,” he said.
Chia was speaking at a panel discussion on fintech and the role of regulation on market innovation at the Global Emerging Markets Regulatory Conference 2017, here, yesterday.
He said cyber risks had existed since the birth of the Internet, hence sandboxing was an “effective and necessary approach” that should be taken to address the problem.
The purpose of the regulatory sandbox, he said, was to provide appropriate safeguards to prevent cyberattacks and data breaches, creating a safe environment for fintech.
The session also discussed technological innovation, which has redefined the way markets are structured and delivered, including the move towards greater automation, new and alternative markets and more efficient application of technology in meeting regulatory requirements.
In 2015, Malaysia became the first country in the region to introduce regulatory framework for equity crowdfunding (ECF), and in less than a year since then, 14 issues collectively raised a total of RM10.4 million through the six Security Commission (SC)registered ECF platforms.
Last year, SC introduced the peer-to-peer (P2P) financing framework to further broaden financing avenues for micro, small and medium enterprises.
Six P2P operators are registered and expected to be fully operational this year. These measures were introduced to facilitate wider accessibility to market-based financing.
(From left) Oliver Wyman partner and head of Asia Pacific public policy Jacob Hook, Hong Kong Securities and Futures Commission senior director and head of risk and strategy and vice-chair of the IOSCO Committee on emerging risk Benedicte N. Nolens, KPMG Singapore’s financial services advisory practice head Chia Tek Yew and WeInvest co-founder and chief executive officer Bashkar Prabhakara before a panel discussion on fintech and the role of regulation on market innovation at the Global Emerging Markets Regulatory Conference 2017 in Kuala Lumpur yesterday.