The Central Bank of Nigeria (CBN) has released Sandbox operating guidelines for banks and Financial Technology (FinTech) firms launching new products into the market.
The new rule requires that the banks and FinTechs conduct live tests of their new innovative products before launching them into the market.
The directive, contained in the CBN Regulatory Sandbox Guidelines released at the weekend, said the new rule was in view of increasing consumer appetite for payment solutions and the need to ensure that new products meet consumers’ expectations.
It said the Sandbox application process is also open to both existing CBN licensees (financial institutions with financial technology initiatives) and other local companies. The apex bank described a sandbox as a closed testing environment designed for experimenting safely with web or software projects.
The apex bank said the regulatory sandbox policy is a formal process for firms to conduct live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with regulatory oversight, subject to appropriate conditions and safeguards.
The new policy, the apex bank said, would enable it stay abreast of innovations while promoting a safe, reliable and efficient Payments System to foster innovation without compromising on the delivery of its mandate.
The framework defines the establishment, rules and operations of a Regulatory Sandbox for the Nigerian Payments System in order to promote effective competition, embrace new technology, encourage Financial Inclusion and improve customer experience, with a view to engendering public confidence in the Financial System.
The policy is expected to increase competition, widen consumers’ choice and lower costs. It will also ensure appropriate consumer protection safeguards in innovative products.
“To clearly define the roles and responsibilities of stakeholders and the operations of the Sandbox for the Nigerian Payments System industry and ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system,” the CBN said. According to the apex bank, innovative products are expected to improve accessibility, customer choices, efficiency, security and quality in the provision of financial services.
