SCB updates its regulatory sandbox framework to boost FinTech innovations
The Saudi Central Bank (SAMA) announced that it has updated the Framework of its Regulatory Sandbox. The step was taken as part of SAMA’s efforts to achieve several national strategic goals through the promotion of the Regulatory Sandbox’s involvement in the Financial Sector Development Program (FSDP).
FSDP is a key objective of the Saudi Vision 2030 that 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 provide their own array of 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 the Saudi society and its citizens by promoting further innovations in technology-based financial services.
Operating within a holistic framework, the strategy will support a broad range of FinTech activities through several initiatives serving as catalysts for change, the most notable of these initiatives is having its framework updated; as it will allow FinTech companies to submit Regulatory Sandbox applications as of Sept. 6, 2022.
SAMA launched the Regulatory Sandbox initiative back in 2018 to garner the participation of local, regional and international FinTech institutions and companies seeking to take advantage of current and new technologies to provide 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 launching many of those products and services to the clients within the financial sector by capitalizing on the experiences of Regulatory Sandbox certified companies, the number of which reached 38.
The Central Bank pointed out that the updated framework of the Regulatory Sandbox is open for both local and international applicants to apply be they 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 applying.
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.
The Central Bank in cooperation with Saudi Fintech, will hold in the coming days, an introductory workshop on the updated regulatory framework for the legislative experimental environment.