In line with its commitment to develop an enabling and inclusive regulatory environment that promotes FinTechs and support innovation, the Bank of Ghana in partnership with EMTECH Service LLC, has launched a regulatory and innovation sandbox pilot.
According to the Central Bank, the regulatory and innovation sandbox is a supportive and controlled policy environment that enables firms to test innovative products, services and business models under the supervision of a regulator.
It is also of strategic importance in driving financial inclusion through innovative digital financial services as it presents opportunities to reduce time-to-market, allow regulators to learn about innovations faster and encourage innovators to formalize their business.
It will also incentivise incumbents to experiment with new ideas.
A statement issued by the Central Bank stated that, the regulatory and innovation sandbox will provide a forum for financial sector innovators to interact with the sector regulator to test digital financial service innovations while evolving enabling regulatory environment.
“In this regard, the Bank and the innovator are able to assess the usefulness, viability and safety of innovations through shared understanding of their respective interests,” the statement noted.
It also noted that, the sandbox will cover a broad spectrum of innovations in the financial services sector, targeting women and improving financial inclusion in the country as the bank is on the lookout for remittance products, crowd funding products and services amongst others.
“Innovations eligible for the sandbox environment will have to satisfy broad categories such as new digital business models not currently covered explicitly or implicitly under any regulation; new and immature digital financial service technology; and innovative digital financial services products that have the potential of addressing a persistent financial inclusion challenge,” it added.
It further added that, “within the broad categories outlined, the Bank of Ghana would give preference to products and services leveraging blockchain technology, remittance products, crowdfunding products and services, e-KYC (electronic know your customer) platforms, RegTech (regulatory technology), SupTech (supervisory technology), digital banking, products and services targeting women financial inclusion and innovative merchant payment solutions for micro, small and medium size enterprises (MSMEs).”
The sandbox will also be available to banks, specialised deposit-taking institutions and payment service providers including dedicated electronic money issuers as well as unregulated entities and persons that have innovations that meet the sandbox requirements.