Ideas and Insights

Regulatory Sandbox Framework: The Future of Kuwait Fintech

Financial Technology (Fintech) has emerged as a key source of competitive advantage globally for many financial institutions as it contributes greatly to enhancing consumer experience and operational efficiency. During the first half of 2018, investments in fintech companies expanded geographically across all regions to reach USD57.9 billion constituting 875 deals. Europe contributed more than USD26.0 billion (44.9%) whereas investments in Asia reached USD16.8 billion (29.0%).

GCC region is also adapting fintech solutions as the regional financial institutions seek to benchmark themselves against global standards to enhance their customer experience and improve operational efficiency. UAE emerged as a pioneer in the region and other GCC countries also have begun exploring its potential. In addition to regulating the fintech industry, UAE has introduced incubators and accelerators to stimulate the fintech start-ups. Countries such as Kuwait, Bahrain and KSA have already implemented regulatory sandbox frameworks to encourage innovation.

Kuwait Regulatory Sandbox Framework

Central Bank of Kuwait (CBK) launched a Regulatory Sandbox Framework with the objective of providing a safe and sound environment to test products, services and business models related to electronic payments. It also encourages institutions to adopt financial innovation which is going to be vital for managing competition in the modern financial services industry. The regulation was issued in September 2018 in conjunction with law No. 20/2014 concerning the electronic transactions.

Benefits to Participants


The Regulatory Sandbox Framework targets both companies and individuals striving to provide innovative Fintech products or services that are based on, or relevant to the electronic payment of funds either by using a new technology or an existing technology in an innovative way.

Application Eligibility Criteria

Application Duration

A maximum duration of one year is allowed to complete all stages of the Regulatory Sandbox. Further extensions are also available on CBK’s discretion.

Withdrawal is allowed at any stage of the process; however, written notification is required with necessary justifications and clarifications. CBK has the right to not accept a subsequent application for a period of one year after withdrawal.

Stages of Regulatory Sandbox


Global financial institutions are rapidly employing Fintech solutions in efforts to drive operational efficiency and respond to customer demands for more innovative financial products and services. The launch of Regulatory Sandbox Framework by CBK is the cornerstone of Kuwait’s Fintech industry as it promotes financial innovation by providing a safe environment to test Fintech models. This will encourage Kuwaiti banks to benchmark against global standards and remain competitive in the international arena.

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