The financial technology industry in South-East Asia is booming, and as the tide of financial technology changes people’s lifestyles, the government is seeking to ensure that financial technology start-ups and financial institutions have room to experiment and act cautiously.
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The place to test fintech innovation is known as the fintech regulatory sandbox.
Fintech regulatory sandbox frontrunner
Singapore, Malaysia and Thailand are the three most advanced countries in the area of Southeast Asian financial Technology regulatory sandbox.
Singapore launched its financial technology regulatory sandbox in June 2016. During the sandbox experiment, specific laws and regulations were relaxed for the sandbox entity. In addition, it is expected that the technology developed will be more widely deployed in Singapore.
Singapore currently has three active sandbox entities, according to the monetary authority of Singapore (MAS) website. They are: Kristal Advisors, Thin Margin, FriendTransfer.
So far, an insurance technology (Insurtech) start-up company Policypal (insurance mobile apps to help manage and purchase policies) has graduated from the sandbox.
To oversee financial innovation, the central Bank of Malaysia has created the financial Technology Enabler Group (FTEG), which is also responsible for the management of the financial technology regulatory sandbox. The sandbox allows financial technology companies to participate in tests that do not exceed 12 months in the test period, even those that do not operate in Malaysia.
So far, sandbox has six approved participants in various sub-sectors of the financial industry, including remittance services, electronic payments, insurance technology and financial consulting.
The newest addition to the sandbox is Jirnexu, Asia’s only full stack of financial technology solutions provider to provide customers with End-to-end digital capture tools and solutions.
Thailand launched the financial technology regulatory sandbox in December 2016. The central Bank of Thailand has approved four financial technology companies operating in the sandbox. These companies are promoting innovation in the area of block chains and biometric technology.
The rise of insurance technology has also prompted the Thai Insurance Commission Office (OIC) to develop a specific industry sandbox. The insurance technology sandbox, launched in June 2017, aims to further develop the country’s digital insurance solution.
Financial Technology regulatory Sandbox new admission
In late 2017, Indonesia’s central bank launched the fintech regulatory sandbox, allowing fintech companies to test their services for six months under the central bank’s supervision.
Only the following six major areas of financial technology companies can enter the sandbox: payment system development (including block chain, distributed ledger), aggregate payment, Internet Investment management and wind control, Internet insurance, credit, financing business and capital allocation, other financial services (judged by the central bank).
Financial technology will be at risk, so governments must be better prepared to combine this mess with the current financial system. Overseeing the sandbox is a good way for Southeast Asian governments to design and operate the sandbox quickly, or they may fail.