Amidst the many fintech products in the market and awaiting approval, the Central Bank's (CBSL) Financial Intelligence Unit (FIU) is unhappy that there aren’t RegTech (short for Regulatory Technology) products to improve the way businesses manage regulatory compliance.
RegTech solutions enable the delivery of regulatory requirements more proficiently and effectively than fintech, a CB official said, adding that RegTech can assist financial institutions with KYC (know your customer), AML (anti money laundering) and cheque fraud.
Analysts say that as the Sri Lankan financial industry is not very aware of the RegTech products which are an advanced concept, foreign investors aren’t willing to invest here as the market is not as developed as say Singapore, Hong Kong etc.
A fintech sandbox, a framework set up by the Central Bank to allow small-scale, live testing of financial innovations by private firms in a controlled environment under CB supervision, was launched in February. Due to the COVID-19 situation no one applied, CBSL officials said.
Sri Lanka has about 20 fintech start-ups dealing mainly in digital payments and alternative finance, according to industry analysts. Fintech firms need to partner with commercial banks and then apply to test their products in the sandbox. Virus-free. www.avast.com