Digital technology has changed the way the Ghanaian financial service industry offers products and services to consumers. New financial service business models based on digital technologies, popularly referred to as FinTechs, are enabling inclusive access to financial services across diverse product types including savings, payment, credit, advisory services, investment management, insurance and pensions.
With the passage of the Banks and Specialised Deposit-Taking Institutions Act, 2016(Act 930) and the Payment Systems and Services Act, 2019(Act 987), a conducive environment has been created to spur innovative digital financial services without risking the stability of the financial service industry. However, the dynamism in the digital financial service ecosystem requires regular retooling of the regulatory environment for continuous relevance in the promotion of innovation and the mitigation of emerging risks.
To this end, the Bank of Ghana has established a regulatory and innovation sandbox as an important tool for evolving a regulatory framework supportive of responsible innovations and for nurturing new business models. This framework enables small scale, live testing of innovative financial products, services and business models by eligible financial service providers and start-ups (operating under a special exemption, allowance, or other limited, time-bound exception) in a controlled environment under the supervision of the Bank of Ghana. By this arrangement, innovators are permitted to temporarily test new ideas without being subjected to the full set of regulatory requirements applicable outside the sandbox while addressing users’ and the regulator’s respective concerns.

The Objectives of the Regulatory Sandbox are stated as follows

(i) permitting the Bank to obtain evidence pertaining to financial innovation with a view to improve regulations, guidelines, and policies for emerging technologies;
(ii) assisting the Bank to learn about innovations faster;
(iii) identifying and mitigating risks associated with innovative products, services and business models prior to go-live;
(iv) allowing innovators to test their innovative solutions in a controlled environment, while ensuring safety for consumers and the protection of the overall payment and financial ecosystem;
(v) reducing time-to-market for innovative products, services and business models of innovators;
(vi) reducing the cost of innovation for start-ups and existing entities (payment service providers, Banks, Specialised Deposit-Taking Institutions, Non-Bank Financial institutions);
(vii) encouraging emerging innovators to formalize their businesses; and
(viii) bridging the information and expectation gap between Bank of Ghana as a regulator and innovators for effective collaboration towards a robust, resilient and inclusive financial service industry.

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