Regulatory sandbox expansion: Exploring the leap from fintech to medical artificial intelligence

Abstract

This paper explores the expansion from fintech-based regulatory sandboxes to those that include medical artificial intelligence (AI) by examining their potential to foster innovation and accelerate market access while ensuring safety and compliance, especially considering how they provide a flexible framework for medical AI companies to develop and test new technologies. This work also highlights the key risks involved, including data privacy, ethical concerns, real-world validation, and regulatory consistency, and proposes strategies for mitigation. Using case studies from the United States, the United Kingdom, the European Union, Indonesia, Japan, and China, this paper illustrates how regulatory sandboxes can support AI-driven healthcare innovation. Overall, although regulatory sandboxes present several risks, they are valuable for advancing medical AI, granted that they balance innovation with robust oversight to ensure patient safety and long-term benefits.