Building ‘regulatory sandbox’ would help Ohio join fintech revolution

Recently introduced legislation in the Ohio Senate offers a smarter way for Ohio to regulate the rapidly emerging financial technology sector, or “fintech.” The bill proposes building a “regulatory sandbox” in which fintech companies may test new products or services and experiment in the marketplace under the supervision of expert regulators, but without the added expense of Ohio’s full regulatory regime.

The proposal looks promising for companies and consumers.

Logan Kolas is an economic policy analyst with The Buckeye Institute’s Economic Research Center and the author of Policy Solutions for More Innovation: Build a Regulatory Sandbox for Financial Technology Innovators.

Fintech firms provide banking and investing apps, crowdfunding platforms, and online financial services such as Venmo, Acorns, and Credit Karma. These products, services, and technologies help consumers protect and strengthen their finances. They make money and investments more accessible and may be especially helpful to Ohio’s financially disadvantaged and unbanked consumers.

But Ohio’s archaic rules governing financial services and technology make it harder and more expensive for fintech firms to bring their innovative products to market.