So-called digital sandboxes – or self-contained test environments with synthetic data and prototyping tools – can take the pain out of proof-of-concepts for startups eager to work within the financial industry.

The chief data, information, and intelligence officer of the UK’s Financial Conduct Authority just announced that the FCA will work with upstart NayaOne to build a safe, efficient way to test fintech products.  

The move to create a permanent sandbox follows several successful pilots. It also comes less than a year after the US Consumer Financial Protection Bureau decided to shut down its own fintech-focused sandbox, which was unpopular with consumer protection groups and deemed “ineffective” by the CFPB. 

The FCA’s sandbox will give fintechs access to over 200 assets that they can use to test their tools, prove their products work and can protect consumers, and be a launch point for potential long-term partnerships. The regulator is particularly interested in tools that could help solve issues with authorized push payments fraud, greenwashing, and other scams.  

“One of the primary reasons we invest in tech and innovation is to provide better support and to regulate,” exec Jessica Rusu said. “The FCA digital transformation programs are centered on driving efficiencies and reducing the regulatory burden for firms.” 

Through its sandboxing tools, NayaOne promises to help firms test out tech for the highly regulated financial services industry securely, in less time, and at a lower cost. The firm announced a similar partnership with Lloyds Banking Group late last year.