OLU OJO PHILLIPS
Governor of the CBN, Mr Godwin Emefiele, who recently unveiled his vision 2024 for his second term in office, disclosed that the establishment of the regulatory sandbox would be one of his priorities between now and 2024.
The creation of regulatory sandbox would provide a safe space for banks and startups to test novel concepts and products, promoting the country’s ambitions to become a Fintech hub and easing the licensing and application process for nascent enterprises.
Emefiele specifically disclosed that the apex banks will work with NIBSS, banks and Fintechs in developing the sandbox.
“The sandbox will enable us to test financial innovations by Fintechs and the banks in a controlled environment, in order to assess its impact on the growth and safety of our financial system,” he declared.
The importance of regulatory sandboxes to Fintech cannot be overemphasized.
Sandbox helps align compliance and regulation with the rapid growth of Fintech companies without drowning them in rules, but at the same time, without compromising on customer security.
Another goal is to attract the attention of different players like the banks, private equity and venture capital funds in the hopes of securing investment.
Fintech startups participating in regulatory sandbox initiatives can therefore potentially convince investors, who previously have been hesitant to invest, that they are working on both their regulatory obligations as well as their product or service innovations.
YOU MAY ALSO READ:CBN Governor Blanks out Cryptocurrency in his Vision 2024
Regulatory sandboxes benefit customers, Fintech startups (innovators), regulators and investors.
Companies get the opportunity to work with regulators while testing their products in a live market. Regulators, on the other hand, can develop more appropriate regulatory policies through greater visibility into new innovations.
Customers get better protection, firstly because company products are tested in a controlled environment before official rollouts, and secondly, because regulatory bodies are able to implement more focused policies.
Finally, banks and other investment funds are afforded more confidence in an entity’s ability to comply with regulation while still being able to develop truly disruptive products and services