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Thailand to set up fintech regulatory sandbox
According to latest reports, the Bank of Thailand is planning to launch a regulatory sandbox for fintech product experimentation early next year, which will enable fintech developers to receive licences quickly.
The Nation reported at a press briefing Vireka Suntapuntu, senior director of the Financial Institution Applications Department, recently said that the central bank was holding an online public hearing via its website about the regulatory sandbox until October 15. Suntapuntu added that commercial banks will be free to join the sandbox in the first quarter of 2017, while the non-bank financial institutions and fintech companies will be able to apply in the second quarter.
The experimental period under the regulatory sandbox will be around 6 to 12 months. She further explained businesses interested in joining the BOT’s fintech sandbox must have innovative lending, payment and money-transfer services and products. In addition, these products and services must be offered only within Thailand.
"Participating in regulatory sandbox experiments allows for speedier approval for the solution than otherwise, if during the experimental period of less than one year, they can prove that their solutions secure and give benefits to consumers and Thai financial system”, Bangkok Post quoted Suntapuntu.
She said that the regulatory sandbox will facilitate information sharing between the central bank, banks and other fintech operators, while ensuring regulatory compliance. Also, the BOT would ease some regulations if experiments show them to be obstructing the competitiveness of fintech companies and banks. Moreover, if the products and services from the sandbox can facilitate convenience, safety and protection for consumers, the BOT might consider adjusting the KYC (know your customer) rules to facilitate their use.
Importantly, all participating banks and fintech companies must inform their customers that they are in the regulatory-sandbox process. In addition, they will be required to pay compensation to customers in the event of damage resulting from using their products and services, according to Suntapuntu.