The Fintech Supervisory Sandbox (FSS), launched by the HKMA in September 2016, allows banks and their partnering technology firms (tech firms) to conduct pilot trials of their fintech initiatives involving a limited number of participating customers without the need to achieve full compliance with the HKMA's supervisory requirements. This arrangement enables banks and tech firms to gather data and user feedback so that they can make refinements to their new initiatives, thereby expediting the launch of new technology products, and reducing the development cost.
In the light of the experience obtained in operating the FSS, the HKMA has upgraded the FSS to FSS 2.0. FSS 2.0 has the following new features:
To help develop the Regtech ecosystem, the FSS (including the Chatroom) is also open to Regtech projects or ideas raised by banks or tech firms.
The HKMA has adopted the following principles in operating the FSS:
The HKMA has not laid down an exhaustive list of the supervisory requirements that may potentially be relaxed within the FSS environment. Banks and their partnering tech firms intending to access the FSS are advised to get in touch with the HKMA early. The HKMA stands ready to discuss with them individually on the appropriate supervisory flexibility that can be made available within the FSS.
Until the end of October 2019, 92 new technology products have been tested in the FSS. Out of these cases, 42 pilot trials have been completed, and the products have subsequently been rolled out. Separately, banks have collaborated with tech firms in 58 trial cases. Banks and their partnering tech firms that use the FSS are able to gather real-life data and user feedback on their new fintech products or services more easily, so that they can make refinements to them as appropriate before the full launch. Hence, the FSS facilitates banks and their partnering tech firms to rollout fintech initiatives earlier, at a lower cost and with better quality upon full product launch. Please refer to the following chart for further details.
The HKMA, the SFC and the IA have launched their respective sandboxes. If a firm intends to conduct a pilot trial of a cross-sector fintech product, it may apply to seek access to the sandbox it considers most relevant. The regulator will act as the primary point of contact and assist in liaising with the other regulators for the firm to access the sandboxes concurrently. Below are links to contact points of the sandboxes operated by the SFC and the IA.
The FSS has been linked with similar pilot testing facilities of overseas supervisory authorities. On 1 February 2019, the Global Financial Innovation Network (GFIN), a group of international organisations including the HKMA, invited applications from firms wishing to test innovative financial products, services or business models across more than one jurisdiction. For details, please refer to the link below: