The Royal Monetary Authority (RMA) received 12 applicants from Bhutanese individuals and registered information and technology firms for the first kind of financial technology (FinTech) innovative ideas initiative.
The initiative was aimed to transform the country’s FinTech landscape, products, and services through innovative ideas and solutions to create new avenues in the financial ecosystem, to offer benefits through improved access to financial services, to increase the efficiency of existing processes, and to create new business opportunities to support the digital economy.
An official from RMA said FinTech is a technology that would accelerate and assist in enhancing the current financial services.
As per the FinTech Regulatory Sandbox Framework, the ideas and solutions have to be innovative products and services that revolve around money transfer and remittance services, digital lending, compliance, and digital know your customers, digital platform, RegTech, SupTech, open banking or applications program interfaces services (APIS), financial inclusion services, and products, digital payments, cybersecurity services, and products, sustainable financing, and Fintech in response to COVID-19.
FinTech innovative ideas also include mobile technology applications (banking, insurance, etc), big data or data analytics, open banking or APIS, applications using Distributed Ledger Technologies, Artificial Intelligence, and Machine Learning applications.
The applicants have to participate and submit a testing proposal explaining the FinTech solution detailing the application within 30 days, another 60 days for the evaluation, and six months for testing the products in the sandbox (testing environment for products), said a RMA official.
However, she said in testing the FinTech, the deadline could be extended depending upon the products and solutions.
Additionally, she said, the RMA Sandbox Evaluation Committee would evaluate the novelty, complement the existing financial system, market viability, and compatibility of the product.
“FinTech solution is a learning process for the innovators and regulators,” she said adding that the ideas are tested in a sandbox environment that successful applicants can experiment with guidance and support from regulatory experts, regulatory relaxation wherever applicable, review and feedback from customers and domain experts, access to FinTech innovation resources and grant support.
However, she said, if the product is successful, it has to abide by the regulations and as a regulator, RMA would review the existing regulations or need for new regulations.
Talking about the challenges, she said there are challenges with domain experts since it is a new tech and the success of FinTech depends on customers’ acceptance, confidence and their awareness about the product.
RMA started FinTech Bhutan under the agency to support innovations that will improve the quality, efficiency, and accessibility of financial services in Bhutan.
FinTech Bhutan is responsible for formulating and enhancing regulatory policies to facilitate the adoption of technological innovations in the financial services industry.
Thukten Zangpo from Thimphu