Sammendrag
Regulatory sandboxes guide FinTech firms through regulatory frameworks and hence constitute a prominent mechanism to enable innovative and entrepreneurial activities in the financial services industry. This paper explores how interactions that occur within regulatory sandboxes influence practices of regulators and regulatees, using the theoretical lens of institutional theory and social capital theory. To achieve this, an exploratory approach is adopted using data collected from 13 semi-structured interviews. Findings show that regulator-regulatee interactions influence regulatory knowledge and risk management capabilities, legitimacy and conformity with regulatory frameworks for sandbox participants. Findings also indicate that regulators become knowledgeable of novel technologies and have early access to innovative solutions that are designed to comply with regulatory systems. This research contributes to extant literature on incubation model breakthroughs.
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