The Central Bank of Nigeria, CBN, has said it will test new financial products and solutions being introduced by licensed companies with a sandbox.
To achieve this, the apex bank said it had released a framework for regulatory sandbox operations in a circular issued on Monday by the Director, Payments Services Management, Musa Jimoh and Director, Financial Policy and Regulation Department.
A sandboxis an isolated testing environment that enables users to run programs or software without affecting the application, system or platform on which they run.
The financial services regulator in a circular released on Monday to all Deposit Money Banks, Mobile Money Operators and Payment Service Providers titled ‘Issuance of the framework for regulatory sandbox operations’.
The circular stated, “The Central Bank of Nigeria is committed to building a financial services sector that promotes stability, fosters innovation and deepen inclusion.
“In this regard, the CBN has implemented several reform initiatives towards the achievement of these objectives. In continuation of these efforts, the CBN hereby issues the framework for the regulatory sandbox operations in Nigeria.
READ ALSO: 11 African Nations To Share World Bank’s $5bn Investment
“The framework details the requirements for conduct of live tests on innovative products, services and other solutions in a controlled environment.
“To this end, the CBN shall review the products and solutions of applicants (licensed institutions, fintechs, innovators and researchers) during its implementation.”
The CBN instructed all stakeholders in the regulatory sandbox to ensure strict compliance with the requirements of the framework and all other payments system regulations, as it continued to monitor developments and issue guidance as may be appropriate.
It explained that the regulatory sandbox operation was aimed at increasing “the potential for innovative business models that advance financial inclusion; and to reduce time-to-market for innovative products, services, and business models.”
The CBN added that it would also “increase competition, widen consumers’ choice and lower costs; ensure appropriate consumer protection safeguards in innovative products; clearly define the roles and responsibilities of stakeholders and the operations of the sandbox for the Nigerian payments system industry.”
Other objectives are to ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system; and to provide an avenue for regulatory engagement with FinTech firms in the payment space, while contributing to economic growth.