The ASEAN Financial Innovation Network has introduced an ‘industry fintech sandbox’ to promote greater financial access and inclusion in the south-east Asia region.
Announced at the sidelines of the 2017 Singapore FinTech Festival on 16 November, the ASEAN Financial Innovation Network (AFIN) said in a statement the sandbox would be an “integrated platform for collaboration between ASEAN banks, microfinance institutions, non-banking financial institutions and regional fintechs”.
The new platform by AFIN - a joint initiative between the International Finance Corporation (IFC), the Singaporean financial regulator Monetary Authority of Singapore (MAS) and the ASEAN Bankers Association - will facilitate "development and experimentation of innovative digital financial products and services”, the statement read.
“It will support an array of financial service functions and solutions such as customer onboarding, credit scoring, merchant payments and compliance solutions, amongst others.”
The sandbox will provide a framework for integration and develop industry standards to “connect the backend systems of banks and fintechs” and allow banking institutions to “test out solutions in a quick and seamless manner”.
AFIN would be working together with MAS, Singapore’s financial regulator, along with other regulators in the region to develop greater insights into issues such as security, data privacy and consumer protection.
Commenting on the announcement, MAS chief fintech officer Sopnendu Mohanty said the sandbox would bring about greater adoption of fintech and provide better “financial access” for the wider population.
“The joint platform for experimentation between banks and fintechs gives regulators an opportunity to better understand financial innovations,” Mr Mohanty said.
“This will in turn encourage policy harmonisation and partnerships that would make ASEAN an even more conducive market for businesses and investment.”
IFC director for east Asia and the Pacific Vivek Pathak added that partnerships between different kinds of institutions in the financial sector was “particularly important” in order to minimise costs to “reach the unbanked and underbanked populations”.
A number of financial firms have already signed up to the pilot phase, such as the Unionbank of the Philippines, Yoma Bank and Wave Money in Myanmar, VP Bank in Vietnam, City Bank in Bangladesh and Commonwealth Bank Indonesia.