Financial Crime World

Regulatory Sandbox Guidelines for Financial Innovation Testing in Thailand

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The Bank of Thailand (BOT) has established the Regulatory Sandbox Guidelines for Financial Innovation Testing in Thailand. These guidelines provide a framework for financial service providers to test new technologies and innovations within a controlled environment, ensuring compliance with regulatory requirements and protecting consumers.

Application Process

Financial service providers must submit an application to participate in the Regulatory Sandbox, including:

  • Project Details: A clear description of the project, including its objectives and scope.
  • Benefits: An explanation of the benefits that the innovation is expected to bring.
  • Technology Overview: A detailed description of the technology being used, including its features and functionalities.
  • Business Flow: An explanation of how the innovation will be integrated into existing business processes.
  • Risk Management Plan: A plan for managing risks associated with the innovation.
  • Scope of Testing: A clear definition of what will be tested during the sandbox period.
  • Key Success Indicators (KSIs): Metrics to measure the success of the project.

Requirements for Participation

To participate in the Regulatory Sandbox, financial service providers must:

  • Establish an internal process to support financial innovation.
  • Adhere to strict data security and privacy standards.
  • Implement robust operational risk controls.
  • Conduct thorough KYC/CDD procedures.

Testing Framework

The guidelines outline the nature and scope of transactions to be tested, including:

  • Transaction Characteristics: A description of the types of transactions that will be tested.
  • Target Users: Identification of the users who will participate in the testing.
  • Transaction Volume: The expected volume of transactions during the testing period.
  • Testing Duration: The length of time allocated for testing.

Key Success Indicators (KSIs)

Providers must define KSIs to measure the success of their project, including:

  • Business metrics
  • Technology metrics
  • Consumer protection metrics

Consumer Protection

Providers must implement measures to safeguard users during the sandbox testing phase, including:

  • Call center staff training and readiness.
  • User support channels.
  • Complaint handling procedures.

Exit/Transition Strategy

In case of successful or unsuccessful outcomes, providers must have a plan in place for exiting the Regulatory Sandbox, including transition arrangements for customers, employees, and systems.

Attachments

Self-Assessment Form for the Regulatory Sandbox Financial Innovation Testing

A template for financial service providers to assess their project and provide details on:

  • Technology
  • Business flow
  • Risk management plan
  • Scope of testing
  • Key success indicators

Own Sandbox Financial Innovation Testing Project Report

A template for financial service providers to report on their project progress, including:

  • Project overview
  • Technology
  • Third-party vendors (if applicable)
  • Project valuation/budget
  • Testing framework
  • Key success indicators
  • Target users
  • Testing duration
  • Additional factors related to the tested innovation

Overall, these guidelines provide a structured approach for financial service providers in Thailand to develop and test innovative technologies within a controlled environment, while ensuring compliance with regulatory requirements and protecting consumers.