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SEBI ‘Innovation Sandbox’ to Address ‘Data Access’ Issue

3 MIN READ
Innovation Sandbox

After the RBI, it is now the turn of SEBI and IRDAI to launch their own Regulatory Sandbox Frameworks for Fintech and Insurance companies. SEBI, thankfully, also addresses access to data as an important factor in its ‘Innovation Sandbox’.

After the RBI, it is now the turn of SEBI and IRDAI to launch their own Regulatory Sandbox Frameworks for Fintech and Insurance companies. SEBI, thankfully, also addresses access to data as an important factor in its ‘Innovation Sandbox’.A Sandbox allows companies to test their products and services in a controlled offline environment. This helps products reach stability before they’re adopted by businesses in live market scenarios. A Sandbox significantly reduces risks of losses and improves companies’ ability to innovate and disrupt existing systems with cutting-edge solutions.The main challenge with RBI’s Regulatory Sandbox, announced in April, is the issue of access to data.Any AI / ML based solution needs large amounts of data to test itself and improve its accuracy. Data can be procured from publicly available sources. But these are limited and there is little clarity on how to open this up in a structured way. Data can also be collected privately but large amounts of data are available only with large companies. RBI’s Regulatory Sandbox is open only to start-ups who usually do not have the volume of data an AI/ML solution needs to be built upon.

As Wriju Ray – co-founder and CBO at IDfy – had said to the Economic Times, “Data either comes from larger clients who have a lot of customers or from public data sources, and public data is not within its purview.

RBI’s guidelines on the Regulatory Sandbox has left this issue unaddressed.

SEBI’s Innovation Sandbox, aimed at creating an eco-system of innovation in the securities market, said that “fintech companies should  have access to market related data,  particularly, trading and holding data, which is otherwise not readily available to them, to enable them to test their innovations effectively before the introduction of such innovations in a live environment”.

Our experience in India’s Fintech and ancillary industries has showed us that we are trying to create innovative, out-of-the-box technology solutions. If it is able to provide access to the right sets of data, SEBI’s Innovation Sandbox could help create some truly disruptive solutions for the securities market.


IDfy provides Digital KYC and risk-free onboarding solutions for Fintechs and Insurers. To know more, please write to shivani@idfy.com