Pub. 11 2020 Issue 3

www.wvbankers.org 20 West Virginia Banker T he rise in FinTech has significantly impacted the tra- ditional banking model in recent years. Despite the banking industry’s initial resistance in embracing these companies, national, regional, and local banks alike have rec- ognized the utility in providing customers with the innovative products and services these FinTech companies can provide. Embracing partnerships with these companies can present customers with innovative solutions to unique problems, increasing revenues and innovation while decreasing costs. However, many banks are hesitant to dive in and take advan- tage of the innovation FinTech companies can use to supple- ment their product portfolio. Much of the hesitancy sur- rounding the cultivation of these partnerships stems from the difficulty navigating the complex regulatory requirements. As the financial industry develops, regulators are often slow to react to the ever-changing FinTech landscape. This often results in outdated regulations that prevent FinTech compa- nies from entering the industry and limit a bank’s ability to embrace new and innovative products. Additionally, requiring cash-strapped startups to invest significant capital and en- ergy into obtaining licenses to test new products can create significant delays and scare any potential banking partners from contracting for their services. West Virginia lawmakers recognized these concerns and have proposed a solution. On the 51st day of the West Virginia Legislature’s 60-day session, lawmakers unanimously voted to pass House Bill 4621. Governor Justice signed the bill, and it Enter Sandbox: West Virginia Adopts Innovative FinTech Regulatory Sandbox Program By Randall L. Saunders, Esq. and Jonah D. Samples, Esq., Nelson Mullins Riley & Scarborough LLP