We believe innovation has an important role to play in meeting the challenges following coronavirus.

Our regulatory approach supports innovators and innovative firms through our Innovation Hub, Regulatory Sandbox and TechSprint programme. But we too must constantly evolve and refine our services.

Prior to the pandemic, we had been exploring the concept of a digital sandbox. This would enhance some key features of our innovation services, allowing innovative firms to test and develop proofs of concept in a digital testing environment. There is also an important convening role for us to play, helping to enable greater collaboration to solve complex industry-wide problems.

We are therefore accelerating our plans and will pilot aspects of the digital sandbox on a modular basis to provide support to innovative firms during the crisis.

We want to have open dialogue with the industry as we run this pilot. We will frequently update this page with further details and we are very keen to collaborate with stakeholders to develop the concept to pilot key features.

Digital sandbox explained

Our experiences and engagement indicates that developing a permanent digital testing environment would provide significant value to financial services.

Data has become increasingly pivotal to the way firms operate and engage with each other and the consumers they serve. This means that long-standing challenges like data access and standardisation are increasingly a barrier for market participants and innovators. We also receive requests for support from firms which do not necessarily align with the testing requirements of the regulatory sandbox.

The following features could be the foundations of a digital sandbox:

• Access to high-quality data assets including synthetic or anonymised data sets to enable testing and validation of technology solutions.
• Regulatory call-to-action – as with our latest sandbox cohort, we could identify areas of regulatory interest where we would like to see innovation play a greater role, or issue specific challenges.
• A collaboration platform – to facilitate diversity of thinking, share learnings and foster an ecosystem around solving complex industry wide challenges.
• An observation deck – to enable regulators and other interested parties to observe in-flight testing at a technical level, to inform policy thinking in a safeguarded environment.
• Application programming interface (API) or vendor market place – where FinTech, RegTech and other vendors can list their solutions and APIs, to encourage greater interoperability and foster a thriving ecosystem.
• Access to regulatory support – such as development of testing plans, signposting to relevant regulations, informal steers or support to understand the wider regulatory environment or the authorisation process.

We are swiftly progressing plans so that we can provide support to innovative firms looking to tackle coronavirus-related challenges facing firms and consumers. We will pilot these features and tools to support firms developing specific use cases, and will evaluate the effectiveness of the feature or tool through this pilot.

Pilot next steps

On 21 April 2020, our Interim Chief Executive, Christopher Woolard discussed the digital sandbox as part of Innovate Finance’s Global Summit. You can listen to the podcast here (link is external). We have also spoken about the gaps we believe a digital sandbox could meet, as well as our innovation experience (link is external) which informed our thinking.

We believe it is crucial that we develop the digital sandbox pilot in collaboration with the industry. We will shortly be updating this page with information on specific proposals for launching a coronavirus pilot of the digital sandbox. We will ask for industry feedback on these proposals.

Expressions of interest

In the meantime, we welcome expressions of interest from regulated and unregulated firms, organisations, associations and individuals who would like to learn more, or discuss how they might contribute to developing the digital sandbox.

Email [email protected] to express your interest.