Singapore-based fintech start-ups are going to have an easier time to test their tech solutions. This is due to the fact that the Central Bank which is known as the Monetary Authority of Singapore (MAS) is opening up a sandbox where they can test out their products and innovations till they are completely happy with the results.
MAS has encouraged its fintech industry with a recent research investment that was aimed at helping smaller banks and insurers find tech solutions to their regulatory issues.
Experiment Area
This move to encourage testing of fintech solutions was recently announced by Ong Ye Kung, Singapore's Education Minister and current member of the MAS board. This was designed specifically to help out financial institutions get over regulatory issues with fewer issues. Fintech startups had earlier voiced their concerns that the current regulatory sandbox was too strict for them to test new products and services efficiently.
This is why the MAS will soon be launching a public consultation on a new sub-scheme for their current sandbox. Calling it “Sandbox Express“, it is supposed to give new fintech firms the ability to start experimenting within 21 days of starting. The main restriction will be that the financial activities involved must be low risk or are fully understood by regulators.
The sandbox is designed to handle several financial instruments and conditions. This includes remittance businesses, insurance broking, and recognized market operators. The goal of then sandbox is to implement faster experimentation of fintech rules as well as the faster introduction of new financial services to the market.
Registration Open Till Dec 13
For startups interested in taking up the new testing offer, they will need to make a clear disclosure of their services as well as acknowledgment of the customers they're bringing on. Assessment of entry into the sandbox will be based on how innovative the financial service is and the reputation of the stakeholders in the start-up.
Those who receive approval will be required to submit regular progress reports. They will also need to follow the sandbox strictly. Public consultation for this sandbox will end December 13, 2018.
Though Singapore is relaxing its norms to encourage fintech startups, Mr. Ong points out that Singapore will not permit anyone to have a free hand. MAS will be enforcing their regulations in hopes of balancing the needs of the market and consumers.
Mr. Ong did emphasize the need for more fintech expertise to come in from overseas. Singapore's small size works against its research and development because of the smaller talent pool and the country will continue to encourage foreign companies to set up operations in Singapore.
