The Central Bank of Nigeria (CBN) has directed deposit money banks (DMBs), mobile money operators and payment service providers to ensure strict compliance with the requirements of the framework for regulatory sandbox operations in the country and all other payments system regulations. In a circular posted on its website yesterday, the apex bank emphasised that in line with the requirements of the framework, it would review the products and solutions of applicants during the implementation of the framework.
The CBN had last Wednesday unveiled the framework for regulatory sandbox operations, which, it said, was aimed at ensuring the safety and stability of the country’s financial system, especially in the wake of increasing consumer appetite for payment solutions and emerging disruptive technology in the financial services space. Describing the regulatory sandbox as “a formal process for firms to conduct live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with regulatory oversight, subject to appropriate conditions and safeguards,” the CBN said the mechanism would enable it “stay abreast of innovations while promoting a safe, reliable and efficient payments system to foster innovation without compromising on the delivery of its mandate.” It further stated that in defining the establishment, rules and operations of a regulatory sandbox for the Nigerian payments system, the framework aims to achieve objectives such as promoting effective competition, encouraging financial inclusion, the embrace of new technology as well as improving customer experience.
The Sandbox application process, according to the framework, is open to both existing CBN licensees (financial institutions with FinTech initiatives) and other local companies, which may include financial sector companies as well as technology and telecom firms intending to test an innovative payments product or service industry deemed acceptable by the CBN.