The State Bank of Pakistan (SBP) has launched the second cohort of its Regulatory Sandbox, inviting individuals and firms to submit innovative financial solutions for testing in a controlled regulatory environment. The initiative is designed to support responsible innovation in Pakistan’s digital financial services sector while allowing the central bank to assess emerging technologies and refine the regulatory framework around them. According to SBP, the second cohort will consider proposals under four themes: Artificial Intelligence in Financial Services, Innovations in Payments, Technology-enabled Inward Remittances, and NextGen Financial Services as an open theme. Applications will remain open until November 30, 2026, with only proposals falling within the announced themes eligible for consideration.
The Regulatory Sandbox was initially launched by SBP in August 2025 under its Vision 2028 initiative. The first cohort concluded in June 2026 after selected participants tested their solutions under regulatory oversight and guidance. The first cohort included use cases related to technology-enabled inward remittances, open banking and remote onboarding of merchants, with four solutions successfully demonstrated at the end of the testing period. SBP said the experience and findings from the first cohort would help inform the development of relevant regulatory frameworks for the wider financial industry. The central bank’s sandbox provides a controlled environment where innovative financial products, services and business models can be tested before wider market deployment, allowing both innovators and regulators to assess their practical implications.
The second cohort expands the scope of the programme by specifically including artificial intelligence and payment innovations alongside technology-enabled inward remittances. The AI in Financial Services theme could provide a testing route for solutions that use artificial intelligence in areas such as financial service delivery, customer interaction, risk management or other regulated activities, subject to SBP’s assessment and applicable requirements. The payments theme similarly creates an opportunity for firms developing new payment-related solutions to test their models within a controlled framework. Technology-enabled inward remittances remains another priority area, reflecting the importance of digital channels in facilitating cross-border money transfers. The fourth theme, NextGen Financial Services, provides an open category for proposals that introduce other emerging financial-service models within the scope defined by SBP.
SBP has said the second cohort will support innovation while maintaining consumer protection and financial stability. Interested individuals and firms with solutions relevant to the announced themes can apply through the process outlined in the Regulatory Sandbox guidelines, with applications accepted until November 30. The move gives fintech companies, financial institutions and other eligible innovators an opportunity to test emerging financial technologies while providing the regulator with practical evidence for future policy and regulatory decisions. SBP’s broader innovation framework also includes an Innovation Hub and Regulatory Sandbox as channels through which fintechs, startups and financial institutions can engage with the central bank on new technologies and financial services.
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