The Central Bank of Solomon Islands (CBSI) launched the Regulatory Sandbox (RSB) Framework recently at the CBSI Board room.
A statement from CBSI said the RSB is a guideline or framework through which a controlled testing environment is open and is available for interested genuine innovators of Financial Technologies (Fintech) and its eco-system to test their financial product.
It said the emergence of fintech and digitalization covers key areas such as; payment service providers, innovative solution providers, Micro Small and Medium Enterprise financing, agriculture, insurance, savings, credit, investment and wealth generation, sustainable and renewable power generation, mobile money, remittances, payments transfers, tourism and any other key priority areas.
Following the launching of the Pacific Regional Regulatory Sandbox Guidelines in March 2020, CBSI, with the technical support provided by the Alliance for Financial Inclusion (AFI), developed a Regulatory Sandbox Guideline and Standard Operating Procedures (SOP) specific to Solomon Islands context.
The purpose of the sandbox is to provide and facilitate innovative regulatory approaches that over time should see the ease of doing business in the country, with special emphasis on providing access to and use of high-quality financial services to the unbanked and underserved segment of our society.
The statement said working together with AFI and its members across the Pacific region, CBSI was able to use peer learning and knowledge sharing to develop regulatory and policy interventions which balance innovations and oversight in inclusive FinTech.
Presenting the official remarks during the launching of the RSB, CBSI Governor, Dr Luke Forau said âit is envisioned that this RSB framework is an enabler to the already transformative role that Fintech plays (and will continue to play) in Solomon Islands; particularly in broadening financial access and providing the opportunity to the unbanked and underserved segment of our society.â
Manager for Financial Inclusion Unit, Linda Folia also explained the regulatory sandbox should enable applicants to test their financial service as easily and efficiently as possible without placing undue risk on customers and the financial system.
She said RSB supports the financial sector development exploring responsible innovative solutions that provide opportunity for all Solomon Islanders including the informal sector to access and use a range of financial services that will assist them to achieve greater financial security and financial opportunity.
âIt is also seen as a vehicle for transitioning our informal sector into the formal sector and, the digital economy through digital financial services.
âCBSIâs approach is to balance the need for innovation, broadening, and deepening of the financial sector with the requirements of financial stability and integrity that will foster responsible innovative financial services through creating an enabling environment.
âThis environment is where potential solution providers and innovators can experiment and test their prototype innovative financial services but with clear guidelines and a criterion which enables proportionate regulation and supervision by the Central Bank,â Folia said.
Governor Dr Luke acknowledged the challenges induced by these new and innovative financial services and products as well as the sophisticated risks they do bring in but hopes to remain positive with the RSB in place.
âHowever, we remain positive and open minded that this Guideline will continue to recognize our need and will develop regulations that supports genuine and useful innovation and that it is already designed with appropriate principles that requires applicants to embed adequate risk management, customer protection and redressal mechanisms that enables appropriate mitigation and response to the new risks,â he said.
He said the launching of the RSB is a key milestone for CBSI and was witnessed by the Management of the
Central Bank of Solomon Islands.