The Digital Sandbox is an experimental test environment for UK start-ups that will become a permanent fixture from 1 August 2023.。After two successful pilot runs, it aims to expand its reach by inviting more innovative enterprises, start-ups and data providers.。The goal of the platform is to stimulate innovation and promote growth by supporting businesses in the early stages of product development.。

The success of the British digital sandbox

So far, the digital sandbox is a temporary resource dedicated to pilot projects and so-called "TechSprints" participants.。However, it has proven its value by promoting innovation and growth in small and medium-sized enterprises (SMEs).。More than half of the SMEs participating in the pilot and TechSprints have made significant progress, including launching new products, securing funding, forming partnerships, and winning industry awards or recognition.。

The permanent sandbox is in line with the Financial Conduct Authority's (FCA) commitment to nurture innovative companies and assist them in launching new products and services。In a statement released on July 20, the FCA commented: "This will also help achieve our new secondary objectives to support economic growth and international competitiveness.。"

As part of its support for the development of new promising companies, the FCA announced two years ago its intention to create a "regulated nursery" for newly licensed entities.。In turn, the EU launched its own blockchain industry regulatory sandbox in 2023, hoping to support the development of distributed ledger technology (DLT).。

The UK is one of the world's largest financial and fintech hubs。Innovative businesses can benefit from the digital sandbox, helping them reach real markets。Despite global fintech financing falling to $27.3 billion in the first half of 2023, the sector of the economy is still thriving on UK soil。

What to expect from the permanent digital sandbox？

Participants in the permanent sandbox will have uninterrupted access to high-quality datasets and application programming interfaces (APIs), robust data security, and a collaboration platform。It also features an observation deck that allows regulators, incumbents and others to oversee in-flight testing at a technical level.。

Applications for the permanent digital sandbox will open on August 1 and cover a variety of topics, including banking, investments, loans, payments, insurance, pensions, wholesale buyers and sellers, and cross-industry sectors.。

Applicants will be assessed based on criteria such as scope, innovation, consumer interest, readiness and support needs。FCA wants to ensure that the platform serves the right audience and has the desired impact。The approval process will last up to four weeks and further details of the application process will be announced in August.。