Startups and established businesses developing financial technology (FinTech) solutions are now welcome to test their innovations in a live environment under the guidance and supervision of Lithuania’s central bank. The regulatory “sandbox” offered by the Bank of Lithuania will be open for submissions from October 15, 2018.
“Having developed an innovation-friendly space, we seek to pave the way for faster and easier access to new financial solutions. Ideas generated in the sandbox could quickly move beyond its limits and increase competition in the financial market – without a doubt, this would bring identifiable benefits to consumers, such as more convenient, safer and cheaper financial services,” said Marius Jurgilas, Member of the Board of the Bank of Lithuania.
With the Bank of Lithuania ready to offer consultations on the go, entrants to the regulatory sandbox will be able to test their innovative financial products or business models in a live environment, with real customers. Sandbox participants will also be entitled to certain reliefs pre-agreed with the regulator, including a temporary lifting of some supervisory requirements. Once the testing phase has proved successful, companies will be able seamlessly transfer their services to a regular operating environment.
The regulatory sandbox is open to both existing authorized financial institutions and newcomers. Eligible participants will be selected based on specific criteria, the innovativeness of products or solutions and their benefits to society being the most important among them.
The regulatory sandbox of the Bank of Lithuania can be especially useful in cases when regulation of innovations is insufficient or unclear. Active cooperation between innovators and the regulator could help understand the impact of financial innovation on consumers, identify emerging risks, determine potential regulatory shortcomings and eliminate or reduce any possible adverse effects.
Development of a FinTech-conducive regulatory and supervisory ecosystem as well as fostering innovation in the financial sector is one of the Bank of Lithuania’s strategic directions for 2017–2020.
More information about the Bank of Lithuania’s regulatory sandbox is available here.