North Carolina Regulatory Sandbox Program
What is the Regulatory Sandbox Program?
The North Carolina Regulatory Sandbox program enables the development and testing of innovative financial and insurance products, services, and technologies. It supports emerging technologies, including blockchain, and fosters new applications of existing technology to address challenges, provide benefits, or introduce novel business models and delivery mechanisms not yet widely available in the State.
A major transformation in our systems is on the horizon, with innovation playing a key role in reshaping the finance and insurance sectors. As the system evolves, the regulations governing it will also need to adapt. However, for innovators looking to test new ideas or launch businesses today, some of the existing rules may pose challenges. While these regulations are essential for maintaining high standards in critical services, they are not flawless or set in stone and may not always achieve the desired results.
To stay effective amidst fast, technology-driven changes, regulators must embrace new perspectives and tools. We need to pair strategic reforms with methods that help us keep up with innovation. That is the purpose of the North Carolina Regulatory Sandbox: to allow innovators to test ideas and bring new products to market, all while ensuring consumer protection. It provides an opportunity to collaborate with innovators and gather insights that will guide long-term regulatory changes.
Regulatory Sandbox Program Objectives
Bridging Trust
It is important that the Sandbox program acts as a bridge for information exchange and conflict resolution between the private sector and regulators. The Council will ensure the Sandbox becomes a platform for communication that strengthens the relationship between regulators and innovators.
Collaboration
The NC Innovation Council will go beyond granting waivers and overseeing Sandbox participants’ experiments, it will actively collaborate with fintech and Insurtech firms to understand their real needs. Through the Sandbox program, the Council and partnering regulatory agencies will work alongside businesses to identify the best ways to accelerate growth, foster innovation and create jobs that keep pace with new technologies.
Mutal Benefits for Consumers
The Sandbox Program should also provide benefits for consumers. Many companies propose using new technologies to reduce operational costs and pass those savings on to consumers through lower prices. Some of the most promising innovations aim to offer new products to underserved or excluded groups. For example, mobile technology and innovations in distribution are making cost-effective financial services accessible in both urban and rural areas, where traditional brick-and-mortar locations may be too expensive. Sandbox participants are required to clearly outline their consumer protections, ensuring regulatory certainty for consumers who engage with the innovations being tested.
Additionally, the Sandbox will actively involve consumers, allowing them to provide feedback and share their perspectives on the services offered by companies participating in the program.
Building the Knowledge Base
In this controlled environment, innovation can grow within the right regulatory framework, helping to identify rules that hinder progress in North Carolina. It will also serve as a valuable source of information to reform existing regulations, policies, and laws. The Sandbox will act as a hub of insights, guiding future state legislators in creating policies that foster innovation and boost North Carolina's economy.
