The Bank of Ghana, in collaboration with technology services company EMTECH Services, has launched an innovation and regulatory sandbox to help evaluate solutions in pursuit of its financial inclusivity goals.

Apart from the normal payment services to be hosted in the sandbox, the Bank will give preference to products and services leveraging blockchain technology, remittance products, crowdfunding products and services, e-KYC (electronic know your customer) platforms, RegTech (regulatory technology), SupTech (supervisory technology) and digital banking.

Products and services that aim to support financial inclusivity amongst women and merchant payment solutions for micro, small and medium-sized enterprises (MSMEs) will also be prioritised.

The Bank of Ghana stated: “The sandbox will be available to banks, specialised deposit-taking institutions and payment service providers including dedicated electronic money issuers as well as unregulated entities and persons that have innovations that meet the sandbox requirements.”

The Bank also aims to test out technologies that are not currently covered by any regulation, opening up an avenue of opportunity for blockchain and cryptocurrencies.

Solutions from the sandbox must reduce time-to-market, allow regulators to learn about innovations faster, encourage innovators to formalise their business and incentivise incumbents to experiment with new ideas, reduce the cost of innovation for innovators and provide valuable insight for regulators to evolve effective regulations.

The Bank added: “Effectively, the regulatory and innovation sandbox will provide a forum for financial sector innovators to interact with the sector regulator to test digital financial service innovations while evolving enabling regulatory environment. In this regard, the Bank and the innovator are able to assess the usefulness, viability and safety of innovations through shared understanding of their respective interests.”

In March 2019, the Capital Markets Authority of Kenya launched the country’s first regulatory sandbox that aimed to nurture new products in the markets. Pezesha, an SME digital lending marketplace, has already graduated from the sandbox to offer compliant investment services.

Uganda also joined the regulatory sandbox last year through the Bank of Uganda, in part to foster the growth of Fintech solutions.