ICCK

The draft guidelines on a ‘regulatory sandbox’ for the fintech industry has the potential to usher in disruptions in sectors such as ‘challenger banks’ and ‘open banking’, and promote innovation within the industry, say entrepreneurs. 

A ‘sandbox’ environment allows disruptive technology to be used within a specified protected data set, where multiple innovations can be tested and failures analysed without causing any form of systemic risk. 

Financial services companies, including in payments, lending, remote customer onboarding and others, hope to use this opportunity to test their products and scale up in a limited environment within the compliance framework set up by the Reserve Bank of India, said fintech industry insiders. Being a regulated space, startups are often at the mercy of financial institutions to understand compliance issues, which slows down the pace of innovation. A sandbox feature from the regulator could help smoothen the process, they said. 

Read More: https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/regulatory-sandbox-will-help-fintech-disrupt-without-fears/articleshow/68983910.cms