The Role of Regulatory Sandboxes in FinTech Innovation: A Comparative Case Study of the UK, Singapore, and Hungary

Regulatory sandboxes have emerged as policy instruments designed to support FinTech innovation while maintaining supervisory oversight. By allowing firms to test financial products in controlled environments, sandboxes aim to reduce regulatory uncertainty and facilitate market entry. Despite their growing adoption, empirical evidence of their effectiveness remains limited, particularly in emerging markets. This study explores the impact of regulatory sandboxes on innovation and market access through a qualitative comparative case study of the United Kingdom, Singapore, and Hungary. Drawing on document analysis and thematic coding, the research evaluates sandbox design, regulatory support, and innovation outcomes across the three jurisdictions. Findings show that sandboxes enhance access to funding, accelerate product development, and foster regulator–firm collaboration. While the UK and Singapore benefit from mature ecosystems and structured frameworks, Hungary illustrates sandbox potential in developing markets. The paper contributes to FinTech regulation literature and provides policy recommendations for optimizing sandbox design across varied institutional contexts.