Saudi banking regulator launches regulatory sandbox to test FinTech
The initiative will help the Saudi Arabian Monetary Authority understand and assess the impact of new technologies on the financial services market
Saudi Arabia’s banking regulator has started designing a sandbox regulatory environment, in line with its economic transformation.
The move that mimics similar initiatives by other regulators in the Arabian Gulf will help the Saudi Arabian Monetary Authority understand and assess the impact of new technologies on the financial services market.
Sama plans to transform the initiative into an “intelligent financial centre” that allows local and international companies to test digital solutions they intend to launch in the kingdom, the regulator said in a statement.
The sandbox environment will be linked to the kingdom's Vision 2030, an overarching road map that aims to overhaul and diversify the country's economy away from hydrocarbons. The Financial Sector Development Program (FSDP), geared to transform and diversify the financial sector, and support national economy through financing and investment initiatives for private sector, are among the key pillars of Vision 2030.
Regulators in the Gulf states, including the UAE and Bahrain, are already taking steps to test financial technology and formulate regulations to better govern FinTech and crypto assets such as digital currencies. The financial free zones in Abu Dhabi and Dubai as well as Bahrain's central bank are all running their own separate sandboxes and regulatory programmes.
The sandbox in the kingdom aims to attract financial institutions and local and international FinTech companies, which are looking to provide financial services – whether new or existing – to local and international start-ups, services companies, and professional services companies associated with the financial sector, Sama said.
It has so far granted permission to 11 local and international banks to open and update accounts and allowed seven companies to provide various services in the field of digital payments through the sandbox environment.
Services and products, which are currently being tested, include among others e-wallet services, P2P transfers and purchases through QR Codes and Sada bills, it added.
"It will help financial institution and financial technology companies test their products with relaxed controls, which will have a positive impact on the financial sector, facilitates financial transactions and reduces costs," said Sama.
Updated: February 12, 2019 02:49 PM