Strong Interest in SBP’s Regulatory Sandbox
The State Bank of Pakistan (SBP) has reported strong interest in its Regulatory Sandbox initiative from both regulated financial institutions and local as well as international fintech companies. The sandbox is designed to give innovators a controlled space to test new digital financial products and services without immediately rolling them out across the entire market.
According to SBP, applicants have submitted proposals under different themes linked to open banking, remote onboarding and remittances. This response shows that the financial technology ecosystem in Pakistan is becoming more active, with banks and fintechs looking for new ways to improve customer experience, lower costs and expand access to financial services.
Steering Committee to Oversee the Sandbox Process
To ensure transparency and strong oversight, SBP has created a high-level Steering Committee to supervise the entire sandbox process. The committee is responsible for reviewing use cases, monitoring risks and making sure that live tests are carried out in a safe and controlled environment.
This governance structure is meant to strike a balance between encouraging innovation and protecting the financial system. While the sandbox lets participants experiment with new ideas, the Steering Committee ensures that customer funds, data privacy and overall financial stability are not compromised during tests.
Six Firms Shortlisted Across Three Thematic Areas
In the latest round, SBP has shortlisted six applicants across three thematic areas. Under the Open Banking category, the selected participants are Neem (Exponential Financial Services Private Limited), Digi Khata (SMC-Private) Limited and Swich Retail Private Limited. These companies are working on solutions that can allow customers to securely share their financial data with different institutions through APIs, helping build more connected and personalised financial services.
For the theme of Remote Onboarding of Merchants, the Bank of Punjab has been shortlisted. Its proposed solution aims to make it easier for small businesses and retailers to open merchant accounts and accept digital payments without visiting a branch in person. In the Technology-Enabled Solutions for Inward Remittances category, Barq Fintech (Private) Limited and Taptap Send UK Limited, in partnership with United Bank Limited, have been selected to test new ways of sending money into Pakistan.
Controlled Live Testing for Up to Six Months
According to the central bank, the shortlisted institutions will be allowed to test their proposed solutions in a controlled live environment for a period of up to six months. Each participant will work under specific conditions and limits defined at the time of approval, such as the number of customers involved, transaction size caps and reporting requirements.
This live testing approach allows SBP to observe how new technologies behave with real users and real transactions before they are offered on a larger scale. It also gives firms the chance to refine their products based on user feedback, performance data and regulatory guidance, reducing the risk of costly failures after a full launch.
Boost for Innovation, Inclusion and Customer Experience
SBP expects that the Regulatory Sandbox will promote practical, user-centric innovation in Pakistan’s financial sector. Open banking solutions can help customers see and manage all their financial products in one place, while remote merchant onboarding can support small businesses in joining the digital economy without heavy paperwork.
New technology-enabled remittance services can make it faster and cheaper for overseas Pakistanis to send money home, which is a major source of foreign exchange for the country. By combining innovation with strong regulatory oversight, SBP aims to support financial inclusion, improve customer experience and maintain confidence in the stability of the financial system as new digital solutions are introduced.
