Bank Negara issues details of fintech sandbox framework
PETALING JAYA: Bank Negara Malaysia (BNM) issued details of the Financial Technology Regulatory Sandbox Framework yesterday after a one-month consultation process.
“The regulatory sandbox will enable the experimentation of fintech solutions in a live environment, subject to appropriate safeguards and regulatory requirements,” it said in a statement yesterday.
The framework is now in effect and open for application.
BNM said it received over 60 comments and suggestions from various stakeholders including financial institutions, fintech companies, associations and other corporates, and has expanded the eligibility criteria to clarify the focus of innovations that the sandbox aims to support.
“Innovation should have clear potential to improve the accessibility, efficiency, security and quality of financial services; enhance the efficiency and effectiveness of Malaysian financial institutions’ management of risks; or address gaps in or open up new opportunities for financing or investments in the Malaysian economy,” it added.
The central bank reviewed the minimum standards and requirements for participation in the sandbox to encourage wider participation of fintech companies.
Applicants to the sandbox are required to demonstrate that a product, service or solution has been developed to a functional stage and is ready for testing. The applicant must have a good understanding of risks during testing, with adequate resources to effectively manage the risks.
Applicants will be informed of their eligibility to participate in the sandbox within 15 working days of BNM receiving an application, followed by preparatory engagements between BNM and the applicant prior to testing.
“The framework reflects BNM’s long-standing policy in striking an optimal balance between promoting innovation whilst preserving financial stability and protecting consumer interest. Based on the level of queries and feedback received during the consultation period, BNM is encouraged and looks forward to receiving applications to test new ideas and deploy new solutions under the sandbox,” Financial Technology Enabler Group chairman Aznan Abdul Aziz said.
The finalisation of the framework aims to provide an environment that is conducive for the deployment of technology to foster innovations that can contribute to the growth and development of Malaysia’s financial sector.