| Danial Norjidi |
THE Autoriti Monetari Brunei Darussalam (AMBD) FinTech Regulatory Sandbox was highlighted during a FinTech (financial technology) talk as part of the Brunei MSME Festival at the BRIDEX Hall in Jerudong yesterday.
The talk featured two speakers – Head of FinTech Unit at AMBD Haji Mohammad Khairul Zaki bin Haji Mohidin and BruPay CEO Haji Sophian bin Dato Seri Setia Dr Haji Mat Suny.
The Head of FinTech Unit at AMBD in his presentation shared that on February 27, 2017, AMBD formally issued the FinTech Regulatory Sandbox guidelines which aim to aid the development of FinTech in Brunei Darussalam through the creation of a regulatory sandbox for safe and responsible experimentation.
“The pace of innovation in the financial services industry is accelerating because of the advances in technology,” he said, noting as an example that in China it is more convenient to pay at shops and restaurants using mobile wallets.
“FinTech is transforming financial services that can bring benefit to businesses and consumers, but this phenomenon is not without risk and the financial services sector is known to be one of the most highly regulated sectors in the world.”
“There are regulations that providers must comply to, but introducing regulations prematurely may stifle innovation and potentially derail the adoption of useful technology.”
“In balancing risk and keeping up with the pace of innovation, AMBD has introduced a FinTech Regulatory Sandbox,” he said.
“The FinTech Regulatory Sandbox is a framework that enables qualified companies or businesses to experiment with innovative FinTech solutions in a relaxed regulatory environment, for a limited period of time and legal parameters.”
He noted that, to date, there are more than 20 FinTech Regulatory Sandboxes that have been established by regulators and authorities globally, including in the United Kingdom (UK), Australia, Singapore, Malaysia, Dubai and many more.
He then explained how interested FinTech companies or licensed financial institutions can apply to enter the sandbox.
“Before submitting an application to our sandbox, as prerequisites, applicants should be able to show that they have done their due diligence including testing the proposed solution in a laboratory environment, as well as have knowledge on the relevant legal and regulatory requirements.”
He added that applicants may engage AMBD through the feedback office if they require any further information or clarification.
“So there are three phases for our sandbox,” he said. “Upon submission of the application, relevant AMBD functions will assess the application and will inform the applicants of the potential suitability or otherwise for our sandbox within 10 working days of receiving all necessary information for making the assessment. This is called the application phase.
“Once an application has been assessed as suitable, they will then move to the evaluation and preparation phase.
“We will then evaluate the application in more detail. There is no fixed time for this phase, as this depends on the complexity of the applications, the completeness of the information and the specific legal and regulatory requirements involved.
“AMBD will work together with the applicant on any further refinements that might need to be made during the application.
“Applicants will be informed in writing. Upon receiving written approval, successful applicants may begin testing during the experimentation phase. AMBD and the sandbox entity will be in constant communication on the progress of the testing. Relevant AMBD functions will also start to consider if any regulatory requirement is required at the end of the testing period.
“Upon successful completion of the experiments, a sandbox entity must fully comply with all relevant legal and regulatory requirements,” he added.
One of the approved applicants in the AMBD FinTech Regulatory Sandbox is BruPay. It offers an electronic wallet system that allows users to make payments to traders using the BruPay smartphone app.
During the talk, the BruPay CEO spoke on some of the events and public outreach activities it carried out and participated in.
He spoke of BruPay’s launch in November 2018, as well as release of its latest update which incorporates the merchant offering into the existing BruPay app and automates the merchant registration process.
Speaking to the Sunday Bulletin, he elaborated on the response they have received to the merchant update. “We’ve had a few merchants that have already signed up and they’ve started to make use of BruPay as a form of payment.”
“The feedback from them is that it’s user-friendly and not as complicated as they would have thought it was going to be,” he said, noting the positive response to how payments can be conducted using QR codes.
“We are aiming to work with several larger organisations but when you launch it at an early stage, it’s the smaller ones that can adopt it first, because it’s less of a process for them to adopt. But when you want to take it to a larger scale you have to bring it in with the all of the processes and control measures that they have, and we are working towards that.”
He shared that 10 merchants are already registered, while another 30 are in the registration process.
On what is next for BruPay, he said, “You will see us being active in raising the awareness levels. Now the product is at a stage whereby it can go out to everybody and can go out into the merchant phase.”