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 addition to the pilot trial function offered by FSS 2.0, FSS 3.0 facilitates eligible trial projects of research and development (R&D) to apply for a maximum of HK$1 million funding support under the Innovation and Technology Commission (ITC)'s Public Sector Trial Scheme (PSTS).
To enhance FSS 3.0, the HKMA is collaborating with Hong Kong Cyberport Management Company Limited (Cyberport) to pilot FSS 3.1, a new track of funding scheme.
In the light of the experience obtained in operating the FSS, the HKMA upgraded the FSS to FSS 2.0 in 2017. 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.
As of end-December 2022, pilot trials of 274 fintech initiatives had been allowed in the FSS. Separately, banks have collaborated with tech firms in 196 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 29 October 2020, the Global Financial Innovation Network (GFIN), a group of international organisations including the HKMA, launched a new cohort of the cross-border testing pilot and 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:
Launched in November 2021, FSS 3.0 facilitates tech firms to apply for funding supports under ITC’s PSTS for Technology Companies (PSTS-TC) or PSTS for Incubatees & Graduate Tenants of Science & Technology Parks Corporation and Hong Kong Cyberport Management Company Limited (PSTS-SPC).
The FSS 3.1 Pilot provides development-stage funding support to the leading financial technologies projects that have been approved and completed in Cyberport’s Fintech Proof-of-Concept Subsidy Scheme (PoC Scheme) 2021. The Pilot aims to promote commercialisation and wider adoption of the projects which fit into the HKMA’s regulatory mandate. The FSS 3.1 Pilot is administered by Cyberport.
For more details, please refer to the dedicated website for the FSS 3.1 Pilot (https://fss2022.cyberport.hk).
If a firm plans to make use of the FSS for conducting pilot trial of its fintech products, please contact the HKMA through the email address below:
If a tech firm wishes its trial project to be evaluated for the issuance of ‘letter of support’ for PSTS funding application under FSS 3.0, please contact us through the email address below:
For enquiries about the FSS 3.1 Pilot, please contact Cyberport, administrator of the scheme, through the email address below: