By The Pulseline News Desk
Sri Lanka must embrace financial technology and digital innovation while ensuring that financial stability, consumer protection and public trust are not compromised, Central Bank of Sri Lanka (CBSL) Governor Nandalal Weerasinghe has warned.
Addressing the Sri Lanka FinTech Festival 2026 on Tuesday (3), Weerasinghe has said the rapidly evolving financial technology sector offered significant opportunities to transform financial services, expand financial inclusion and strengthen the country’s economic competitiveness.
However, he has stressed that innovation must take place within a strong regulatory framework, warning that financial stability should remain the foundation of all developments in the sector.
“As we welcome the possibilities generated by FinTech, I wish to emphasise one fundamental principle: financial stability cannot be compromised and must be preserved at all costs,” he has said.
The Governor has noted that while emerging financial technologies were creating new opportunities for businesses and consumers, they were also introducing risks that required greater regulatory attention.
These include cyberattacks, operational disruptions, financial fraud, data breaches, inadequate consumer disclosures, excessive leverage and the increasing concentration of critical financial services among a limited number of technology providers.
He has also highlighted the regulatory challenges associated with cross-border digital transactions and warned that certain digital assets could expose consumers to significant market volatility while potentially facilitating illicit financial activities.
Against this backdrop, he has said Sri Lanka needed to strike a balance between encouraging competition and innovation and maintaining effective supervision, sound risk management and strong consumer protection mechanisms.
Regulatory support for innovation
Despite the emerging risks, Weerasinghe has reaffirmed CBSL’s commitment to supporting technological advancement and responsible innovation in the financial sector.
He has said emerging technologies, new financial products, innovative service delivery models and strategic partnerships would continue to reshape the financial services industry.
CBSL intends to work closely with innovators and financial institutions to facilitate responsible experimentation while ensuring effective regulatory coordination.
In this regard, he has highlighted CBSL’s FinTech Regulatory Sandbox as an important mechanism for supporting innovation.
The facility provides a structured and controlled environment in which eligible financial technology solutions can be tested under appropriate regulatory safeguards before wider implementation.
The Governor has said such initiatives would help encourage innovation while allowing regulators to identify potential risks and ensure that new financial products and services operate within an appropriate framework.
“Our message is clear: we welcome innovation, we encourage competition, and we support progress, but always with stability, trust and consumer protection at the centre,” he has said.
FinTech as a driver of economic growth
Weerasinghe has expressed confidence that financial technology could become an important driver of Sri Lanka’s economic transformation if policymakers, regulators and innovators worked together to maintain the right balance between technological advancement and financial stability.
He has said responsible FinTech development had the potential to expand access to financial services, strengthen competitiveness and contribute to building a more resilient economy.
His remarks come as Sri Lanka seeks to accelerate its digital transformation and develop technology-driven financial services, while maintaining confidence in the country’s financial system.
CBSL’s position signals that although technological innovation will be encouraged, financial institutions and technology providers will be expected to give equal priority to risk management, regulatory compliance and consumer protection.
Leave a comment