Fintech Sandbox

Definition

A controlled regulatory environment established by a financial regulator that allows fintech companies to test innovative products, services, or business models with real customers under relaxed regulatory requirements and close supervisory oversight. The UK Financial Conduct Authority pioneered the concept in 2016, and sandbox programmes now operate in over 50 jurisdictions worldwide. Participation in a regulatory sandbox provides startups with regulatory guidance, credibility, and a pathway to full authorisation, and has become a significant factor in fintech company valuations.