The Central Bank revealed on Tuesday that a programme known as an ‘innovation sandbox’ will be established later this year. This programme will allow tech and finance enterprises to securely trial their cutting-edge products before they embark onto the market.
This step was taken following a suggestion from the Department of Finance in a report on the banking system 18 months ago. The regulatory body was advised to reassess its current innovation hub and to ponder on introducing a sandbox programme – a concept already alive in other countries, such as the UK.
As of April 2018, the Central Bank inaugurated its innovation hub to facilitate discussion between start-ups, existing financial firms and regulatory bodies outside the conventional supervisory process, as they collectively develop financial novelties based on emerging technologies.
In November, the regulatory body declared that it had conducted 375 interactions over the first five and a half years of being operational, and intended on expanding this hub.
Deputy Central Bank Governor, Sharon Donnery expressed that in the face of a shifting financial framework, the Central Bank’s methods are progressing to keep the financial system aligned with consumer interests and the broader economy. She emphasized on their influential role in maximizing the advantages of innovation and mitigating any associated risks, while also stressing the importance of improving their involvement with financial service innovation and establishing the Innovation Sandbox Programme.
Donnery added that the forthcoming sandbox and the enhanced innovation hub would aid firms in integrating safeguards during their initial phase of development, instilling a regulatory culture and ensuring their preparedness for the obligations that accompany being regulated firms.
However, the Central Bank clarified that it had no intentions of giving firms any derogations or waivers from regulatory stipulations.
The Central Bank announced that the sandbox programme would adopt a ‘thematic approach’ to test innovations and that the first themes and an invitation to potential participants would soon be issued. The initial programme is slated to kick-off later this year, it revealed.