Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
BIS Report: Inside the Regulatory Sandbox: Effects on Fintech Funding
BIS | Monetary and Economic Department | Nov 20, 2020
Policymakers around the world are adopting regulatory sandboxes as a tool for spurring innovation in the financial sector while keeping alert to emerging risks.
Using unique data for the UK, this paper provides first evidence on the effectiveness of the world’s first sandbox in improving fintechs’ access to finance. Firms entering the sandbox see a significant increase of 15% in capital raised post-entry, relative to firms that did not enter; and their probability of raising capital increases by 50%.
See: UK Digital sandbox – coronavirus (Covid-19) pilot
Our results suggest that the sandbox facilitates access to capital through two channels: reduced asymmetric information and reduced regulatory costs or uncertainty.
Our results are similar when we exploit the staggered introduction of the sandbox and compare firms in earlier to those in later sandbox cohorts, and when we compare participating firms to a matched set of comparable firms that never enters the sandbox.
Download the 42 page PDF report --> Now
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