Brunei Darussalam Central Bank (BDCB) logo. (BDCB official website)
On May 21, the Brunei Darussalam Central Bank (BDCB) officially amended its Guidelines on FinTech Regulatory Sandbox. This instrument was intended to be “a catalyst for innovation in the financial sector”.
Notably, amendments were made to expand participation eligibility and make it more inclusive. Qualified financial institutions and established banks, including those in Islamic financial institutions, can now run parallel innovations testing alongside tech companies.
This is crucial as previously participation was strictly limited to standalone fintech startups. The amendments are likely to promote greater industry collaboration that will accelerate digital transformation.
Updates have also been made to establish clearer standards for “suitability” of the proposed solutions, as well as refined application requirements to align with current cybersecurity standards.
That said, the new guidelines enforce more rigorous standards regarding genuine innovation, which means accepted projects must be meaningfully novel (such as artificial intelligence (AI) or blockchain applications) rather than simple replicas of existing technology. Furthermore, robust proof of security measures is required in the new application form.
What does this mean for business?
This government move aligns closely with Brunei’s Wawasan 2035 vision, which positions the fintech sector as a main driver of the country’s economic diversification goals. Brunei expects to escalate the financial industry’s contribution to its gross domestic product (GDP) to 8%, up from a baseline that hovered around 5% over the past decade.
Currently, fintech activity in Brunei is still heavily concentrated on digital payments and financial infrastructure. For the next decade, Brunei aims for a stronger emphasis on Islamic finance and sustainable finance to genuinely drive growth. With the new sandbox guidelines, the country’s main leverage (the Islamic banking sector) will be able to run innovation tests jointly with startups.
This is realistically achievable given the relatively small scale of startups in the country, which will keep FinTech and bank collaborations less complex. Consequently, this structural agility highly increases the likelihood that Brunei will rapidly expand its use of targeted technologies to maximise efficiency across its entire financing system.
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