Bank of Thailand will allow financial institutions and non-bank players to submit requests to experiment with financial technology innovations in a regulatory sandbox from first quarter of 2017.
Fintech solutions submitted for testing must benefit consumers or the Thai financial system, senior director for Financial Institution Applications Department Vireka Suntapuntu said.
The central bank hopes that the regulatory sandbox, which has yet to be launched, will enhance knowledge and experience of financial providers, and lead to appropriate regulations, she said.
The Thai authority's decision to utilise a regulatory sandbox follows in the footsteps of the UK, Australia, Singapore and Malaysia.
The sandbox will be a safe space where banks and non-bank players can test and conduct fintech trials, while ensuring that consumers are not exposed to risks.
"Participating in regulatory sandbox experiments allows for speedier approval for the solution than otherwise, if during the experimental period of less than one year, they can prove that their solutions secure and give benefits to consumers and Thai financial system," she said.
The central bank will hold a public hearing on the regulatory sandbox from Sept 14 to Oct 15.
Mrs Vireka said the innovations could remove the need for customers to show up in person and bank branches.
For example, overseas banking service users can take a selfie, use retinal scanning or voice identification for customers to verify themselves.
"Not showing up in person may begin next year, with a few initial conditions, as many financial technology innovations have been developed. If identity verification technology as a part of Know Your Customer is safe, personal appearances may no longer be necessary," she said.
Requests to experiment in the regulatory sandbox must involve payment, cash withdrawals, borrowings and potential services in the future, she said, adding that the central bank will not set any restrictions, such as capital size requirements, for participators, but the number of users in the sandbox may be limited to force service providers to be accountable in case of damages.