Come Play in Ohio’s (Regulatory) Sandbox
Published: Thu Jan 19 2023
When I was a kid, my favorite thing to do visiting my cousin's house was playing in his sandbox. He always had the coolest Tonka trucks and tractors. I didn't have a sandbox, so it was always a nice treat to climb in, dig around with toy backhoes and dump trucks, and pretend we were building something in real life. We would start with a smooth foundation and then work up to a miniature version of a building. It would take time to perfect, but we were in our own little world and improved on our "building" by tearing it down, learning from mistakes, and recreating it. Obviously, a costly endeavor in the real world if we were to build, make mistakes, learn, tear down, and recreate.
What does my story have to do with Financial Services? This highly regulated industry is burdensome and costly (to the tune of trillions) to companies operating in the space. Imagine a new or existing business wanting to test new products and services only to find that the federal or state regulatory environment makes it too difficult even to get off the starting blocks. Innovation can be constrained, and the beneficiaries, consumers, are impacted. We've seen financial services innovation gain traction over the last several years with new solutions created, startups raising funds, and partnerships made.
Imagine my excitement when legislation was passed in Ohio to enable financial services innovation further. I've been in the industry for quite some time, and I can say that "excitement" and "financial services" rarely collide in the same sentence. However, this is BIG news! Ohio is already set up to be a leader with an abundance of tech talent, low operating costs, venture capital, and three innovation centers. With the addition of a regulatory sandbox, companies can quickly test the market with new products or services without crossing many hurdles. Ohio has joined other states (11 to be exact) to create a regulatory sandbox, and our legislation allows companies to test products in their markets (reciprocity). Ohio has many more ingredients of the recipe for success than the competitor states. In 2016, the UK instituted the first fintech-focused sandbox, which has proven to be a catalyst for innovation.
Large corporations and startups alike have a clear runway to test new financial products, innovate with mitigated risks, and collaborate amongst themselves to drive the industry forward. This tool is necessary for companies to continue moving toward a more customer-centric market. Consumers are in the driver's seat, and financial services need to meet them when and where they want to be met…even if it starts by playing in Ohio's sandbox.
So, be a kid again. It’s never too late. You’re invited to Ohio’s Sandbox.