MAS Issues Proposal For Fintech Sandbox

The Monetary Authority of Singapore (MAS) announced today that it has issued a proposal for a regulatory sandbox for Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term startups and pilot schemes.

Companies will be able to test new financial services in a more relaxed regulatory environment.

The aim of the proposal is to make it easier for financial institutions and other companies to experiment with fintech offerings in the future.

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In June 2015, Head of MAS, Ravi Menon, first suggested “innovation in a sandbox” as an approach for innovation in financial services. Today’s announcement is a further step towards implementing this plan.

Clarity

Although the fast-evolving fintech landscape encourages financial institutions to test out new innovations, there are occasions where it is not particularly clear if the fintech offering complies with regulatory requirements or poses unacceptable risks. The MAS said that this uncertainty may hinder promising innovations and could result in missed opportunities.

With the regulatory sandbox, companies will be able to test new financial services in a more relaxed regulatory environment but within a well-defined space and duration.

Fintech services will then be able to be assessed on criteria such as its innovation, if the company intends to deploy the solution on a broader scale and if the service brings benefits to consumers and the industry, according to the MAS.

Boost Innovation

MAS deputy managing director Jacqueline Loh commented: "MAS aims to provide a responsive and forward-looking regulatory approach that will enable promising fintech innovatons to develop and flourish. The sandbox will help reduce regulatory friction and provide a safer environment for fintech experiments. We believe this will give innovations a better chance to take root."

MAS hopes that the sandbox will help to boost innovation in Singapore's banking sector. It follows the establishment of SG-Innovate by the Singapore government in April this year which is similarly designed to bolster Singapore's ambition to be the fintech Hub Hub A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method Read this Term for Asia-Pacific.