Malaysia has set up a fintech regulatory sandbox framework to support innovations in the country’s financial services sector.

The country's central bank, Bank Negara Malaysia, has set out the framework after a one month consultation with startups, banks and other stakeholders. The new sandbox will allow experimentation of fintech solution in a live environment.

The central bank said the innovations should improve accessibility, efficiency, security and quality of financial services, as well as open up new opportunities for financing or investments in the country’s economy.

Sandbox applicants should be able to show that a product or service has been developed to a functional stage and is ready for testing, should also have a proper understanding of risks during testing, and adequate resources committed to manage the risks.

Financial Technology Enabler Group chairman Aznan Abdul Aziz said: “The Framework reflects the Bank’s long standing policy in striking an optimal balance between promoting innovation whilst preserving financial stability and protecting consumer interest.

“Based on the level of queries and feedback received during the consultation period, the Bank is encouraged and looks forward to receiving applications to test new ideas and deploy new solutions under the sandbox”.

The Financial Technology Enabler Group was set up earlier this year to formulate regulatory policies to support the adoption of technological innovations in the country’s financial services sector.