September 28, 2020

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MAS launches upgraded Sandbox Express

The Monetary Authority of Singapore (MAS) introduced a new initiative for enterprises, Sandbox Express, with the aims of offering a more efficient platform for the testing of innovative financial products and services within the market.

Enterprises which satisfy the criterion can begin testing products in Sandbox Express, within three weeks of applying to MAS. The new initiative comes with a pre-set sandbox. Each sandbox will come with its own restrictions, ease on regulations and forecast of outcomes.

Under the current regulations, it takes about six months to a year to customise a sandbox. Enterprises must go through a two-stage process to obtain the approval from MAS.

In the initial stage, it takes 21 days for applicants to be notified on the prospects of them being suited for the sandbox. The final stage will be the final approval given by MAS.

MAS said that as each sandbox used for testing of technologies is unique in its business, technical and regulatory complexities, it takes time for the application to get approved. Each sandbox is unique to its application.

This new initiative allows for faster processing of approvals as it follows standard disclosures and pre-determined rules.

Sandbox Express is best used for low-risk technology testing which are well-understood but the market and can be handled within the pre-set restrictions of the sandbox.

In a consultation paper released by MAS in November last year, it said that it will assess applications based on two criteria: (1) technological innovativeness of the financial service (2) Fitness and propriety of the applicant’s key stakeholders.

Sandbox Express will first be made available to insurance brokers, recognised market operators, and remittance businesses.

“Firms must comply with all conditions of approval, including providing clear and proper disclosure to the customer, as well as submitting regular progress reports to MAS,” said MAS.

A maximum of nine months is given for tests done to be kept in the sandbox. The incentive is to give enterprises additional time to find solutions to any business and technical challenges faced during the testing process.

Enterprises can use this time to plan their route for exiting the sandbox and move forward to releasing their innovation into the market.

It also gives MAS time to manage any regulatory disputes that may come along the way.

Sopnendu Mohanty, chief fintech officer at MAS said: “For innovation to take root, it is important for ideas to be tested quickly, and in a safe environment. Sandbox Express aims to achieve this through appropriate disclosures and pre-defined rules.”

He added that Sandbox Express is a product of experience from managing the previous sandbox. He said that MAS is committed to promote experimentation efforts and an increase in adoption of innovative technologies, within the financial sector.

MAS will be keeping track of whether Sandbox Express is satisfying the growing needs and interests of enterprises in the financial industry.

It will also formulate ways of widening the collection of financial products and services that Sandbox Express could potentially provide.

What is Sandbox?

The FinTech Regulatory Sandbox is an approach that was launched by MAS in 2016 to provide a venue for the conducting of real-time experiments of innovative financial services and business models within the stipulated regulations.

It was established with the aim of promoting experimentation in financial technology (FinTech) and the adoption of these technologies among enterprises. It also aims to push for FinTech adoption on a larger scale, worldwide.