The sands of time

I know everyone laughs about jargon – business bingo, anyone? – but I think we’re all guilty of it to some extent.  I know I expect everyone to understand me when I talk about AML, MLROs and the regulated sector, and the other day my cycling-mad husband accused me of “half-wheeling” him – walking just in front of him, thus forcing him to accelerate.  But I came across something yesterday that I just could not decipher: the regulatory sandbox.

I was doing research on technological advances in AML (part of FinTech – more jargon) and came across the sandbox reference a couple of times.  Is it where new regulations are embedded to keep them upright and isolated prior to being set on fire, like we used to do in chemistry lessons?  Things became a bit clearer when I realised that “sandbox” is the American term for what we English kids would have called the sandpit – the place to play, build castles and dig up unmentionable items.  Perhaps “pit” has negative connotations, because even the very British, London-based, pinstripe-suited FCA is now referring to the sandbox.  In their recently-published “FCA Business Plan 2018/19”, they trumpet the regulatory sandbox which they created in 2016: “Our regulatory sandbox gives businesses of every size the opportunity to test the commercial and regulatory viability of their innovative concepts before they invest more heavily in them, while providing safeguards for consumers.  The sandbox also gives us an understanding of the opportunities and risks of harm that innovation can create.”

But it seems that a simple sandbox in Canary Wharf is not enough: we need to go global.  The FCA tells us that “[in February 2018] we invited stakeholders to share their views on what a global sandbox could look like”.  This is entirely in keeping with the EU view; in the “FinTech Action Plan” issued by the European Commission in March 2018, it says: “The Commission invites competent authorities at Member State and EU level to take initiatives to facilitate innovation on the basis of these best practices and invites the ESAs to facilitate supervisory cooperation, including coordination and dissemination of information regarding the innovative technologies, establishment and operation of innovation hubs and regulatory sandboxes, and consistency of supervisory practices.“  And there, that’s how you deal with jargon: you strangle it with even more jargon until no-one knows what anyone else is saying.

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8 Responses to The sands of time

  1. Tanguy, Nicolla says:

    Came across this term for the first time in Guernsey recently too – but being Guernsey we had to change the name to “soundbox”. Same meaning though, as a place for innovative ideas to be discussed. Not sure that its anything more than a bunch of staff at the GFSC sitting around a table though at the moment!


    Nicolla J Tanguy
    Managing Director – Bank J. Safra Sarasin Ltd, Guernsey Branch
    Telephone +44 (0)1481 761122, internal: #44 1122

    • Soundbox – maybe that’s better… Although it does make me think a bit of those ghetto-blasters from the 1990s! I think the idea is meant to be like those “soft openings” (which also sounds a bit suspect) at restaurants, where you open but only for friends and family, to test the kitchen and the staff before the paying public shows up. So you have a financially innovative idea and you dry run it against the regulations before any money is put at stake. Or maybe not. I’ve never been to a sandbox or a soundbox or indeed a soft opening, so what do I know!

  2. Gareth Marklew says:

    I have a feeling it comes from a military context, the sandbox in question being one of those big trays of sand which can be shaped into different size models of hills and other terrain, and have big arrows drawn over them and then rubbed out to show possible troop movements and the like. The idea is it’s a safe environment to test possible plans before moving to the real world.

    Still not sure what a “regulatory sandbox” would look like ‘though!

  3. Mik Underdown says:

    I seem to remember that sandboxes are fraught with danger, especially if there are cats about (what my wife used to refer to a “landmines”). This is why modern sandboxes have lids, to protect them when not in use. Be careful, you never know what you’ll dig up……

  4. CDWOS says:

    Shouldn’t the sandbox be full of interesting toys for us to play with!!??

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