The Monetary Authority of Singapore (MAS) has released a consultation paper regarding a proposed “regulatory sandbox” that will allow financial institutions such as insurers to experiment with technology and develop new products.
The regulatory sandbox will enable financial institutions and other interested firms to conduct experiments in an environment where actual products and services can be offered to customers but within a well-defined space and limited time. Many of the usual regulations that apply will be relaxed.
The MAS recognises that failure is an inevitable part of experimentation, so the sandbox contains appropriate safeguards for consumers in case the products offered by the institution fails.
Applications for testing will be assessed on various criteria such as level of innovation of the solution, whether the applicant plans and is able to deploy the solution in Singapore on a broader scale, and whether the solution is beneficial to consumers and/or the industry.
Jacqueline Loh, deputy managing director of MAS, commented: “MAS aims to provide a responsive and forward-looking regulatory approach that will enable promising FinTech innovations to develop and flourish. The sandbox will help reduce regulatory friction and provide a safer environment for FinTech experiments.
“We believe this will give innovations a better chance to take root.”