EXPLORING THE FINTECH FRONTIER: A COMPARATIVE STUDY ON SINGAPORE'S REGULATORY SANDBOX WITH THE INDIAN REGULATORY MECHANISM

Abstract

A ‘regulatory sandbox’ typically involves testing of new products or services in a controlled, regulatory environment. This helps to gather evidence on the benefits and risks of a new financial innovation, while monitoring and managing the risks. The sandbox provides a structured way for regulators and the innovators, to interact with the ecosystem, and assist the regulators to develop regulations that encourage innovation and enable the delivery of relevant, low-cost financial products. It is an important tool that can create a more dynamic, evidence-based regulatory environment that helps to adapt the various emerging technologies. The paper devolves around the niche ‘regulatory sandbox’ mechanism as followed by Singapore, alongside a comparative analytical study with jurisdiction of India, and India’s stance on the regulatory mechanism. The paper aims at analysing the regulatory fallacies in the Indian system by analysing the risks involved, and thereafter looking at the security and financial implications. Ever since the increased valuation and societal consideration of the block chain technology and the secured nodal transactions, the impact and importance it gained, in order to surface a regulatory sandbox in Singapore - being a notable and imminent participant in the technological advancements attached to the financial technology- is inevitable. From P2P lending to the perils of Insurtech, Singapore has been evolving towards the creation of a regulatory sandbox for the fintech industry and hence the understanding of the same plays a pivotal role in the overall Performa. Start-ups such as ADDX and BondEvalue are paving the way to provision of direct access to the financial market and thereby, assisting in the general mitigation in Singapore. Hence, the progress in India, and risk factors attached with it considering there exists no legal framework to govern the functioning of a ‘Regulatory Sandbox’, require in-depth detailing and introspection.