Home Policy & Governance Singapore and Indian authorities look to boost cross-border fintech innovation

Singapore and Indian authorities look to boost cross-border fintech innovation

Global regulatory sandbox ambition: MAS’s chief fintech officer Sopnendu Mohanty, Singapore’s deputy PM and finance minister and deputy chairman of MAS Lawrence Wong, and IFSCA chief technology officer Joseph Joshy | Credit: Singapore Ministry of Communications and Information

The Monetary Authority of Singapore (MAS) and India’s International Financial Services Centres Authority (IFSCA) have inked a fintech partnership with global ambitions as they look to enable companies to test innovative financial products and services across borders.

The authorities’ ‘fintech co-operation agreement’ has two main elements: first, for the two authorities to ‘leverage’ regulatory sandboxes in their respective jurisdictions to support experimentation of tech-based innovations; and, second, for the authorities to share non-supervisory related information and developments on innovation, facilitate discussions on emerging fintech issues and participate in joint innovation projects.

Sandboxes allow fintech-based initiatives to be tested under regulatory supervision but typically focus on compliance with domestic rules and regulations. MAS’s sandbox, which was created in 2016, was among the first fintech sandboxes to be established by any financial regulator. IFSCA, by contrast, is itself a relatively new authority, having been established by India’s government under the IFSCA Act 2019. It opened its regulatory sandbox in 2020.

The newly signed agreement will promote referral of companies to each other’s sandboxes and ‘enable innovative cross-border experiments in both jurisdictions’.

The two authorities also plan to reach beyond Singapore and India’s borders and evaluate the suitability of use cases that could benefit from collaboration across multiple jurisdictions, inviting ‘relevant jurisdictions to participate in a global regulatory sandbox’ – a move that constitutes the creation of a new cross-border test space in the increasingly busy international sandbox arena.

‘Paving way’ to involve multiple jurisdictions

The MAS-IFSCA agreement, announced less than two months after the two authorities agreed a memorandum of understanding on supervisory cooperation, was signed by MAS chief fintech officer Sopnendu Mohanty and IFSCA chief technology officer Joseph Joshy.

“The cross-border testing of use cases between Singapore and India will pave the way for operationalising a broader collaboration framework for fintech use cases involving multiple jurisdictions,” Mohanty said. 

“This agreement is a watershed moment that ushers in a ‘fintech bridge’ to serve as a launch-pad for Indian fintechs to Singapore and landing-pad for Singapore fintechs to India, leveraging the regulatory sandboxes. The possibility of global collaboration on suitable use cases through a global regulatory sandbox is an exciting opportunity for the FinTech ecosystem,” said Joshy.

MAS and IFSCA are both members of the Global Financial Innovation Network (GFIN) – a group of financial regulators and similar organisations with more than 70 members – which has over the past few years evolved a proposed ‘global sandbox’ into what GFIN now prefers to refer to as ‘cross-border testing’ (CBT).

MAS and IFSCA’s reference to a ‘global regulatory sandbox’ is a new and separate initiative.

See ‘GFIN’s cross-border testing (CBT) programme’ boxout at the end of this article

A GIFT to business

IFSCA is located in Gujarat International Finance Tec-City – known as GIFT City – near Gandhinagar, the capital of Gujarat state. GIFT City is a greenfield development, backed by the national and state government, being promoted as a ‘smart city’ and new ‘financial and technology gateway of India for the world’.

IFSCA states that it has ‘laid down principle-based regulatory frameworks governing myriad of activities, such as banking, finance companies, capital markets, funds management, insurance, aircraft and ship leasing […] which have been globally benchmarked and designed to ensure ease of doing business’. 

The authority set out the framework for its regulatory sandbox in October 2020, stating that, if successful in their applications, projects ‘shall be granted certain facilities and flexibilities to experiment with innovative fintech solutions in a live environment with a limited set of real customers for a limited timeframe’. It added that ‘these features shall be fortified with necessary safeguards for investor protection and risk mitigation’.

Other sandboxes in India include the Mumbai Fintech Hub initiative set up by the Maharashtra state government. Meanwhile in Singapore, MAS launched a ‘Sandbox Express’ in 2019 to ‘provide firms with a faster option to test innovative financial products and services in the market’.

GFIN’s cross-border testing (CBT) programme

  • In 2018 GFIN consulted on the idea of a global sandbox (this was proposed by the UK’s Financial Conduct Authority, which – like MAS – had launched its own regulatory sandbox in 2016).
  • In 2020 GFIN ran what it referred to as a ‘cross-border testing’ trial, publishing a ‘lessons learned’ document in 2020 that stated that the project was ‘previously known as the global sandbox’ and that the phrase ‘cross-border testing’ (CBT) was now preferred.
  • In October 2020 GFIN opened applications for its first official CBT cohort for projects looking to ‘test innovative financial products, services, business models or regulatory technology across more than one country or jurisdiction’.
  • Twenty-three regulators participated in the first CBT cohort, with Bank of Lithuania and Ontario Securities Commission as ‘lead regulators’; 38 applications were received from interested firms, with two – Bedrock AI (of Canada) and Business Reporting-Advisory Group (BR-AG) (of Poland) – taking forward their propositions to live tests (which began in July 2021).
  • Bedrock AI’s proposition focused on developing a tool for the Canadian market that could identify potential signs of corporate crisis; BR-AG’s cross-border test sought to develop a sustainability reporting template that could allow regulators to monitor how financial market entities manage sustainability related risks and to perform climate change-related data analysis.
  • The current period (June-September 2022) is seeing the FCA ‘scoping CBT 2.0’.

Sources include: ‘The Global Financial Innovation Network Cross-Border Testing Initiative: Cohort 1.0’ (28-page document published by GFIN in May 2022); & GFIN’s annual work-plan for 2022-2023


‘20-plus regulators back global sandbox as it prepares for first cohort’ – our news article (2 November 2020) on the opening of the application window for GFIN’s first cross-border testing cohort (after a trial the previous year)

‘Indian financial services authority opens regulatory sandbox’ – our news article (28 October 2020) on the IFSCA sandbox