Central Bank of Malaysia issues details of fintech sandbox framework

Bank Negara Malaysia has issued details of Fintech Regulatory Sandbox Framework that will enable the experimentation of fintech solution in a live scenario, subject to suitable safeguards and regulatory requirements.

According to the official announcement, the move follows the consultation on the proposed Framework which was released on 29 July 2016. The proposal received more than 60 comments and suggestions from a number of stakeholders including fintech firms, financial institutions, associations and other corporate, following which, the Bank expanded the eligibility criteria to clarify the focus of innovations that sandbox aims to support.

“The Framework reflects the Bank’s long-standing policy in striking an optimal balance between promoting innovation whilst preserving financial stability and protecting consumer interest. Based on the level of queries and feedback received during the consultation period, the Bank is encouraged and looks forward to receiving applications to test new ideas and deploy new solutions under the sandbox,” Aznan Abdul Aziz, Chairman of FinTech Enabler Group said.

The potential innovations include improving the accessibility, efficiency, security and quality of financial services; enhancing the efficiency and effectiveness of Malaysian financial institutions’ management of risks and addressing the gaps and opening opportunities for financing or investments in Malaysia.

The Framework is now open for applications and will take effect immediately. Firms looking to test out innovations that improve the accessibility, efficiency, security and quality of financial services can apply. Within 15 days of applying, the applicants will receive the eligibility requirements to participate in the sandbox from the Bank. This will be followed by preparatory engagements between the Bank and the applicant prior to testing.