SCB updates its regulatory sandbox framework to boost FinTech innovations
RIYADH — The Saudi Arabian Central Bank (SAMA) announced that it has updated the framework for its Regulatory Sandbox. The step was taken as part of SAMA’s efforts to achieve several national strategic objectives through promoting the Regulatory Sandbox’s involvement in the Financial Sector Development Program (FSDP).
The FSDP is a key objective of Saudi Vision 2030 which aims to develop the Kingdom’s economy, diversify its sources of income, enable financial institutions to support the growth of the private sector, and allow new companies to offer their own financial services.
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 finance. services.
Operating within a holistic framework, the strategy will support a wide range of FinTech activities through several initiatives that act as catalysts for change, the most notable of these initiatives being to bring the framework up to date; as it will allow FinTech companies to submit Regulatory Sandbox applications from 6 September 2022.
SAMA launched the Regulatory Sandbox initiative back in 2018 to gain participation from local, regional and international FinTech institutions and companies looking to take advantage of current and emerging technologies to offer innovative financial products and services to Saudi markets.
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, of which the number reached 38.
The central bank pointed out that the updated framework of the Regulatory Sandbox is open to both local and international applicants to apply whether they are entrepreneurs, non-regulated companies or existing regulated entities, the key differentiator of the updated framework is to move from a cohort-based approach to an always open approach which will give greater flexibility to those who apply.
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 work to a specific one determined for the cohort.
In the coming days, the Central Bank in collaboration with Saudi Fintech will hold an introductory workshop on the updated regulations for the legislative experimental environment. — SPA
