Sama updates regulatory sandbox framework to support more FinTech start-ups

Saudi Arabia’s banking regulator is updating the framework for its sandbox regulatory environment, in line with its economic transformation programme.

The move by the Saudi central bank, also known as Sama, is in line with the goals of developing the kingdom’s economy, diversifying sources of income, enabling financial institutions to support the growth of the private sector and allowing new companies to offer a range of financial services, it said. a statement on its website Thursday.

“The updated framework will also support the objectives of the FinTech strategy by making the Kingdom one of the world’s leading countries in the field, and it will contribute to the economic empowerment of Saudi society and its citizens by promoting further innovations in technology-based financial services, ” said Sama.

Sama launched the regulatory sandbox initiative back in 2018 to attract local, regional and international FinTech companies that want to take advantage of current and emerging technologies to offer financial products and services to Saudi markets.

The sandbox environment is linked to the country’s Vision 2030, an overall road map that aims to overhaul and diversify the country’s economy away from hydrocarbons.

The development program for the financial sector, aimed at transforming and diversifying the sector and supporting the national economy through financing and investment initiatives for the private sector, is among the main pillars of Vision 2030.

Other regulators in the Gulf have made similar moves to understand and assess the impact of new technologies on the financial services market.

Regulators in the Gulf states, including the United Arab Emirates and Bahrain, are already taking steps to test financial technology and formulate regulations to better govern FinTech and crypto-assets such as digital currencies.

The updated regulatory sandbox framework is open to local and international applicants to apply as entrepreneurs, non-regulated companies or existing regulated entities, Sama said.

“The key differentiator of the updated framework is moving from a cohort-based approach to an Always Open approach which will provide greater flexibility to applicants. This transition will allow applicants to apply to the regulatory sandbox when they are ready and, in addition, bring their chosen business model /concept and not function to a particular one particular to the cohort,” it said.

The Saudi Arabian Central Bank in collaboration with Saudi Fintech will in the coming days hold an introductory workshop on the updated regulations for the legislative experimental environment.

The number of certified companies in Sama’s regulatory sandbox reached 38, the statement said.

“The initiative proved to be very successful as it enables Sama to adopt many services and products by issuing instructions and regulations, as well as launch many of these products and services to clients in the financial sector by leveraging the experience of regulatory sandbox certified companies ,” said Sama.

Updated: September 1, 2022, 10:02 am