Palestine Monetary Authority Launches the Regulatory Sandbox to Test Innovative Solutions in Financial technology

Ramallah and Al-Bireh Governorate, 6/3/2022

The Governor of the Palestine Monetary Authority (PMA), Dr. Feras Milhem, announced the launch of the Regulatory Sandbox, which is considered an experimental environment for testing innovative solutions and new financial services in a safe space, an enhancing and supportive environment, and under the supervision of the PMA.

This was during a ceremony organized by the PMA, at the Millennium Hotel in Ramallah and Al-Bireh governorate, with the participation of a number of representatives of the banking, financial, economic and technological sectors, innovators, business incubators and accelerators, media and influencers.

The Governor welcomed the participants and attendees at the launching ceremony of the Regulatory Sandbox and thanked all the partner institutions, noting that the launch of the Regulatory Sandbox constitutes a turning point in the methodology of the PMA's work by adopting and promoting innovation and creativity in the field of financial technology.

The governor said that the objectives of the sandbox are to allow the testing of innovative financial solutions, applications and technologies in a real business environment and with real users, and to enable providers and innovators of financial technology solutions to obtain appropriate guidance and direction, as well as enabling them to overcome legislative and legal obstacles, and improve the level of digital financial services provided to users.

He added that the entities eligible to participate in the sandbox are licensed financial institutions, entrepreneurs or start-ups, financial technology and communications companies, and any other local or foreign entity that provides financial services. He added that the categories of projects eligible to apply for the test include savings and lending services, risk management services, fraud monitoring and limitation, digital verification services, digital identity, and any financial, regulatory or supervisory services that achieve the objectives of the Regulatory Sandbox.

The governor explained that the PMA is currently working on building and developing the instant payment system to facilitate the process of transferring funds instantly between customers’ accounts, whether between banks or various electronic payment companies, as well as the electronic billing display and collection system, which will link all billers with payment tools through a unified interface, calling on all commercial entities to deal with electronic payment, stressing that there will be a cost to using cash in the near future.

The Governor of the PMA stressed that while these developments open new horizons, the PMA is working on a balance between encouraging innovations in the field of financial technology, and maintaining its role in protecting markets, customers, data privacy and investors at the same time.

The governor indicated that the PMA believes in the importance of cooperation and partnership with the private sector in all fields, specifically with business accelerators and incubators. It established the Financial Technology Advisory Council in 2020 - which includes a group of workers in the creativity system of business accelerators and incubators - Its members had a significant role in contributing to building the general framework of the Regulatory Sandbox.

Mr. Eyad Zietawi, the Executive Director of the Financial Stability Group, introduced the Regulatory Sandbox, its working mechanism, and how to participate in it. Then an introductory video about the Regulatory Sandbox has showed. Mr. Laith Kassis, Chairman of the Financial Technology Advisory Council, spoke on the importance of the Regulatory Sandbox for innovators and its assistance to them in overcoming the obstacles they face during the process of developing their innovations. Ms. Majd Khalifeh, the CEO of the Flow Accelerator, and Dr. Saeed Sabry, a fintech consultant at Intersect, gave a presentation about the existing fintech initiatives that are eligible to benefit from the Regulatory Sandbox, and how the sandbox will implement their initiatives in a regulated and secure environment.

It is noteworthy that the "Alternative Approaches to Financial Inclusion of Small and Medium Enterprises (SME)" programme which is implemented by GIZ on behalf of the German Ministry of Economic Cooperation and Development (BMZ).