The MNB promotes the innovations of the financial sector by a Regulatory Sandbox among the first countries in the regionPrint
The MNB promotes the innovations of the financial sector by a Regulatory Sandbox among the first countries in the region
Budapest, 19 December 2018. – The MNB promotes the spread of FinTech innovations in a safe manner that does not pose risks for the financial system by the launch of a Regulatory Sandbox. In the test environment that starts operating from 2019, the financial institutions that meet the defined criteria may fulfill certain provisions of MNB Decrees with a deviation for a limited time while testing innovative solutions with strong consumer protection and close regulatory monitoring. The innovators may apply to the test environment through a preliminary consultation already starting today.
The Financial Stability Council of the Magyar Nemzeti Bank (MNB) has adopted the MNB Decree concerning the operation of the Hungarian Regulatory Sandbox. The Regulatory Sandbox, operating from the beginning of 2019 is a supervised environment for testing innovative solutions with real clients where the financial institutions ready for the test may receive the opportunity for a temporary deviation from the compliance with provisions defined in certain MNB Decrees.
Hereby, financial institutions applying FinTech innovations can try out their ideas on the market while the supervisory control takes place in the context of a new type of cooperation. In the planned operation of the Regulatory Sandbox, the central bank has incorporated the experience gathered during intensive consultations with market players and the operation of the MNB Innovation Hub, besides international practices.
Based on feedback form domestic market players, exemption from burdens hindering the implementation of innovative solutions or causing heavy administration in the initial phase of the test may promote the establishment of digital, cost-efficient and competitiveness-increasing solutions efficiently. The application of these solutions will result in a broader, cheaper and more conveniently available range of services and products for the clients. Through the Regulatory Sandbox, the MNB can get to know the innovative solutions more deeply, and the central bank may potentially review the contents of its relevant Decrees based on these aspects.
The MNB is committed to the promotion of FinTech innovations, which – besides moderating the costs of the financial system – incentivizes a higher-level client service as well. Within this framework, the central bank launched a market consultation on the potential supporting tools in Summer 2017. The aim of the Innovation Hub launched based on the results – practically the first one in the region – is to facilitate the communication between market actors and regulators, to promote international co-operation, and to issue guidance on legal aspects arising in connection with FinTech solutions.
The Regulatory Sandbox that has been set up now pays particular attention – in line with international best practices – to consumer protection and to constantly ensuring the MNB’s supervision. Testing may be carried out with a limited number of clients for a limited time period, while providing enhanced consumer information, after the positive evaluation given by the central bank on the submitted request of the given financial institution. The criteria for testing have been established by the MNB based on intensive consultations with financial market players and are supervised continuously.
While formulating the Decree regulating the Regulatory Sandbox, the MNB conducted a preliminary consultation with the European Central Bank. The Decree has been published; therefore, the MNB is waiting for the applications for participation in the test environment already from today.
Magyar Nemzeti Bank