The Arizona Chamber of Commerce and Industry this week hosted an internationally broadcast information session with viewers in Mexico, Israel, and Great Britain to discuss Arizona’s new FinTech sandbox.
Elected leaders involved in passing Arizona’s first-in-the-nation FinTech bill, H.B. 2434, spoke about what it means for innovation and prosperity in Arizona. Speakers included the bill’s sponsor, state Rep. Jeff Weninger, and Arizona Attorney General Mark Brnovich.
Starting August 3, the FinTech sandbox will go into effect and other companies will be able to apply to join the sandbox.
Within a sandbox, a business is afforded fewer barriers to enter a market in exchange for limited access to the market.
From the date of approval, the business will remain in the sandbox for two years with the possibility for a one-year extension after careful assessment from the Attorney General’s office.
The business can usually serve up to 10,000 Arizona residents, but if it demonstrates adequate risk management and capitalization, it may serve up to 17,000 consumers. To protect consumers, the Arizona Consumer Fraud Act as well as other limits placed on financial transactions will remain applicable.
The financial industry is one of the most highly regulated industries, and the creation of the sandbox will allow FinTech to grow without heavy regulatory hindrances.
Arizona is home to 28,000 financial services businesses that employ more than 450,000 people and delivers an estimated economic impact of about $68 billion.
Arizona has a robust financial services industry, but Rep. Weninger and others are working to set Arizona on the path for an even brighter financial future.
“With the help of the attorney general, the governor, and this Legislature, we have really been pushing the boundaries on innovation,” Rep. Weninger said at the event.
Arizona is the first state to apply the sandbox, but it is not a new idea. Great Britain, Canada, Mexico, and Israel have adopted the sandbox with great success. Great Britain saw 90 percent of participants proceed to larger product launches, including FinTech. The sandbox helped FinTech expand from $140 million in 2016 to $370 million in 2017.
Attorney General Brnovich is confident that Arizona’s sandbox will produce similar results in Arizona as well as promote future transformative legislation.
“Arizona is an environment for innovation,” he said. “No matter who you are or where you’ve come from, you can start a business and succeed because we’ve created a business plan and an environment that wants to foster innovation.”