New Buckeye Institute Policy Brief Outlines How Regulatory Sandboxes Can Help Attract and Keep ‘Fintech’ Employers in OhioMar 29, 2021
Columbus, OH – On Monday, The Buckeye Institute released a new policy brief, Policy Solutions for More Innovation: Build a Regulatory Sandbox for Financial Technology Innovators, which calls for Ohio to construct a regulatory sandbox, which would cut red tape that often keeps innovative technology from reaching users.
“While Ohio is currently home to many national banks and financial institutions, it risks losing these employers to other states that are already creating environments where these companies can develop and deploy new products and services,” said Logan Kolas, an economic policy analyst with the Economic Research Center at The Buckeye Institute and the author of the paper. “In building a fintech-specific regulatory sandbox, Ohio can make its regulatory process less daunting, less expensive, and more transparent for these financial technology employers looking to expand, which will keep Ohio competitive in the innovation race.”
A regulatory sandbox serves two primary purposes:
- It cuts regulatory red tape for select industry innovators; and
- It protects consumers from potentially harmful new products.
To accomplish these two objectives, Kolas urged state regulators to construct a “controlled regulatory and consumer-centric environment in which approved firms experiment with new technology for a limited time.” Regulatory sandboxes offer significant advantages, when built the right way, which Kolas outlined as being “voluntary, instructive, transparent, impartial, and—when possible—coordinated with other states.”
By creating a fintech regulatory sandbox, Kolas observed that policymakers can make it easier and more affordable for fintech firms to test new products and services. “In just a few steps, Ohio regulators could loosen regulatory red tape that keeps innovative financial technology from reaching would-be users.”
Policy Solutions for More Innovation: Build a Regulatory Sandbox for Financial Technology Innovators is the first in a series of papers that will offer policy recommendations to spur innovation, attract new businesses, and make Ohio more prosperous.
# # #