The Saudi Central Bank has recently announced to revise the Framework of its Regulatory Sandbox. This action was taken as part of SCB’s efforts to advance the Regulatory Sandbox’s participation in the Financial Sector Development Program in order to meet various national strategic goals (FSDP). The Saudi Vision 2030, which aims to expand the economy of the Kingdom, diversify its revenue streams, empower financial institutions to support the expansion of the private sector, and enable new businesses to offer their own range of financial services, includes the FSDP as one of its key objectives.
The revised framework will promote the goals of the FinTech plan by elevating the Kingdom to the forefront of the industry. It will also aid in the economic empowerment of Saudi society and its people by encouraging new developments in technology-based financial services.
Operating within a holistic framework, the strategy will support a broad range of FinTech activities through a number of initiatives serving as catalysts for change. The most notable of these initiatives is having its framework updated, as it will permit FinTech companies to submit Regulatory Sandbox applications as of September 6, 2022.
SCB established the Regulatory Sandbox program back in 2018 to attract local, regional, and international FinTech institutions and businesses aiming to capitalize on new and emerging technologies in order to provide cutting-edge financial goods and services to Saudi markets. The initiative was a huge success because it allowed SCB to adopt a wide range of services and products by issuing directives and regulations, as well as by launching a wide range of those services and products to clients in the financial sector by drawing on the expertise of the 38 certified Regulatory Sandbox companies.
The Central Bank emphasized that the revised framework of the Regulatory Sandbox is open for local and foreign applicants to apply, whether they are entrepreneurs, unregistered businesses, or currently existing regulated entities. The key differentiator of the updated framework is to move from a cohort-based approach to an Always Open approach, which will give those applying more flexibility.
With this change, candidates will be able to apply to the Regulatory Sandbox whenever they are ready and bring their own business model or concept, rather than being forced to use one chosen for the cohort.
In the following days, an introduction workshop on the amended regulatory framework for the legislative experimental environment will be held by the Central Bank in collaboration with Saudi Fintech.