Reg­u­la­tory sand­boxes vi­tal for fin­tech in­dus­try, says ex­pert

New Straits Times - - Business -

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.

PIC BY SAIRIEN NAFIS

(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.

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