BANK Negara Malaysia (BNM) expects the Financial Technology Regulatory Sandbox, which it introduced in 2016, will continue to be a reliable channel to test new solutions that face regulatory challenges.
The sandbox is created especially to test fintech solutions with high potential to fill in market gaps, the central bank said in its 2019 annual report released today.
It serves as a platform to enable innovative solutions to be deployed and tested in a live environment, but within specified parameters and time frames.
BNM said so far, the sandbox has enabled it to calibrate its policies through an evidence-based approach, while helping participants validate and refine the value propositions of their solutions.
“Customers have also benefited through more affordable, accessible and efficient solutions, which have served to encourage wider adoption of digital financial services,” it said.
As the central bank, BNM said, it is mandated to promote a sound, progressive and inclusive financial system, and it strives to ensure the financial sector continues to innovate responsively for the benefit of the economy and good of Malaysians.
As such, its thinking is guided by three principles: parity, proportionality and neutrality.
“We are also mindful of emerging risks associated with advances in financial technology and new business models.
“This calls for a balanced approach that carefully considers the potential benefits and risks that these developments bring,” it said.
Moving forward, BNM said it will continue to focus on evolving a financial services industry that best serves the needs of Malaysians.
“This also means simultaneously keeping a close eye on risks that may emerge or be amplified as digital innovation becomes a more prominent feature in our financial system.
“Data security, consumer protection and financial integrity, in particular, are among the most important issues that will continue to warrant attention,” it said. — April 3, 2020, Bernama
