- Securities and Exchange Board of India(SEBI) and the Insurance Regulatory and Development Authority of India(IRDAI) has announced sandbox initiative to encourage startups in their segments by making data and systems available to them.
- A sandbox is an enabling infrastructure or interface which is made available to an outside innovator or fintech by a bank so that they can test their product and services in real time.This live testing reduces the time to go to the market and also allows room for failure without actually going for a commercial launch.
- SEBI has named the sandbox initiative as Innovation Sandbox. Innovation sandbox is a shared workspace to ideate, explore new subjects, develop technologies and share knowledge.
- It aims to create an ecosystem which promotes innovation in the securities market.This space allows fintech firms which are not registered with SEBI to be a part of the sandbox.
- Fintech firms meeting Sebi criteria will have access to anonymous, historical data from exchanges, depositories and mutual funds.The data sets would include–KYC data, transaction data such as order log and trade log also mutual fund transaction data.
- Further,IRDAI has also came up with a similar sandbox to ensure flexibility in the insurtech market.But for the IRDAI sandbox, the applicant (an insurance company/broker or individual) should have a net worth of Rs 10 lakh and a standing of one financial year.
- FinTech or financial technology is an industry comprising companies that use technology to offer financial services.These companies operate in insurance,asset management and payment and numerous other industries.
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