siliconindia | | November 20199WHILE MOST REGULATIONS EMERGE FROM THE RESULTS WITNESSED IN THE SANDBOX, THE CBB HAS MANDATED ALL REGIONAL BANKS TO BE FULLY COMPLIANT WITH THE OPEN BANK REGULATIONSas existing financial institutions to test-out their innovative financial solutions in a controlled time-bound environment directly with volun-teer customers under supervision. It possesses benefits for both startups & financial institutions to test their feasibility and viability of their solu-tions. Yasmeen avers, "We think that the sandbox is a great way for SMEs to scale-up their business in an agile manner. It acts as a virtual space that will enable anyone to test-out their Fintech or financial innovation in a controlled environment with live customers. I would say our journey has been very successful in the sand-box, and ever since we launched it up until now, we have admitted 35 com-panies, out of which two have grad-uated successfully and have moved-on to receive full licensing".When it comes to `who can be a part of it?' Bahrain's model some-what mirrors renowned jurisdic-tions like the UKs that includes specific modifications to meet lo-cal market requirements. The much liberal-styled sandbox doesn't hold pre-requisites when it comes to the requirement of having a pre-techni-cal testing of solution. Thus, making it possible for any one with just mere-ly an idea to be admitted into the sandbox and utilize its platform for conceptualizing their ideas and build a prototype and test it on customers. Moreover it takes about 15 days for the central bank to respond to any applicant applying to the regulatory sandbox that is open on internation-al scales. So, the composition of the sandbox at present includes compa-nies from all around the world. "Theirs should be a product or solution to support the financial sec-tor in general that is solving a spe-cific pain-point or innovation that will support the financial sector anywhere in the world. So, compa-nies can use Bahrain as their test bed through the sandbox and then scale-up. Our role is to supervise them, to ensure we place thresholds on these applicants in terms of the number of volunteer customers that they test their solutions during the sandbox period. We also control the size of transactions just to ensure they are not hindering the security of the fi-nancial system," added Yasmeen.Being one of the first initiatives taken by the CBB, the bank has is-sued regulations to support further innovation, and specific regulations for digital financial advisory involv-ing the use of algorithms to provide financial advice to end customers based on customer's behaviours and market trends. Nevertheless, while most regulations emerge from the results witnessed in the sandbox, the CBB has mandated all regional banks to be fully compliant with the open bank regulations. Looking for-ward to an era of digitization that is going to bar-down borders, Yasmeen attests that collaboration and shar-ing of learned information will aid in harmonizing regulations, thereby ensuring international financial se-curity is not compromised. The In-dian jurisdiction stands among Bah-rain's most researched countries and the CBB lies in the process of estab-lishing talks with numerous Indian companies to boost collaborations.
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