Financial Services Regulatory Sandbox
Perhaps one of our most innovative ideas is our regulatory sandbox. A regulatory sandbox can generally be defined as a testing environment where approved entities are permitted to experiment with innovative business models, services or products in a controlled environment that includes appropriate regulatory oversight and consumer protections.
DISB created The District of Columbia Financial Services Regulatory Sandbox and Innovation Council which issued its feasibility report to Mayor Bowser in October 2020. The Mayor and the Sandbox Council support the creation of a regulatory sandbox in the District, and DISB is working to bring that vision to fruition. Currently, legislation to create the Sandbox is before the District Council and we hope for passage in late 2021.
In keeping with the three areas regulated by DISB, the District’s proposed sandbox will focus on FinTech, RegTech and InsureTech innovations. FinTech is short for Financial Technology and includes new technologies that use artificial intelligence and specialized software to improve the delivery of services and products primarily in the banking, investment management and fundraising and nonprofit sectors. FinTech innovators include start-ups and large, well established financial services organizations. RegTech involves the management of regulatory processes through the use of technology designed to ensure adequate monitoring, reporting and compliance. Again, RegTech has been widely adopted in the financial services sector, but it also has applications in other sectors and industries that are heavily regulated. InsureTech involves the collection and analysis of big data to improve the pricing of insurance products, and the use of artificial technology to develop new insurance products and services, including peer-to-peer insurance and on-demand insurance.
It is a goal that the District’s Regulatory Sandbox will address a particular issues that have not been addressed by legacy financial institutions such as the unbanked and underbanked populations. DISB also hopes to see innovators test the feasibility of using technology that eliminates the biases that exist in the current system such as the use of credit scores and educational attainment which we know adversely impact communities of color. Similarly, technology can be used by lenders to make better decisions regarding credit risks and reduce inefficiencies, especially for small business borrowers who have suffered greatly as a result of COVID-19.
For more information regarding the Department’s Regulatory Sandbox, please contact Dana Sheppard at [email protected].
Diversity, Equity and Inclusion Initiative
The Department of Insurance, Securities and Banking is committed to advancing the DC Values of equity, diversity and inclusivity in the financial services sectors. We will strive to tackle economic barriers to opportunity by expanding inclusive access to financial resources and services to help our community thrive and ensure that every resident gets a fair shot in the District’s financial services marketplace.
We believe in:
- Encouraging a community of open-mindedness and inclusiveness among District government employees, residents and industry groups.
- Promoting a sense of accountability among all DISB employees and stakeholders to operate from an equitable and inclusive perspective.
- Fostering an inclusive workplace at DISB that embraces diverse cultures, religions, backgrounds and life experiences.
- Providing effective leadership in the development, implementation and assessment of policies and programs that promote diversity, address the health and economic disparities that obstruct pathways to the middle class, and recognize the unique needs of various communities in the areas of insurance, securities and banking.
- Creating and committing to opportunities for public engagement, education and discourse around issues of equity, diversity and inclusion in the areas of insurance, securities and banking.
- Advancing inclusion through pay equity in order to retain productive and motivated employees and to attract the best candidates for new opportunities.
- Removing barriers that impede our ability to embrace and welcome individuality, diversity, equitable standards and inclusivity and to making a concerted effort to adjust or use solutions to address those barriers.
DISB has established a Working Group on Diversity, Equity and Inclusion to conduct the following work and report back to the DISB staff and key internal/external stakeholders quarterly throughout FY21.
- Propose recommendations to DISB leadership on actions the Commissioner should implement internally to ensure that DISB operates through a lens of diversity, equity and inclusion with emphasis on ongoing diversity trainings, reviewing HR hiring and recruiting practices, internship programs, engaging staff on this topic and ensuring that managers are trained and equipped to manage through the lens of equity and inclusion.
- Gather and conduct research and analyze the level of diversity and inclusion within the insurance, securities and banking industries in the District with data including a breakdown by race, gender, age and sexual orientation.
- Engage with a broad group of stakeholders on issues related to racial diversity and inclusion within the District’s insurance, securities and banking sectors.
- Determine whether current practices exist within the insurance, securities and banking sectors that potentially harm underrepresented groups in the District.
- Make recommendations to DISB leadership by the end of FY21 regarding steps that need to be taken to:
- Address inequities or disparities through better enforcement, new regulation or through its leadership; and steps the insurance, securities and banking industries can take to ensure diversity, equity and inclusion, broken out by voluntary measures; measures to report on, or to better comply with existing law.
- Review existing regulations, rules and laws and make recommendations as to any necessary new local legislative actions that would promote access and equity within the insurance, securities and banking industries. For matters subject to federal regulation and law, propose any needed regulatory changes to the appropriate federal officials.
Financial Services Academy
Led by the District of Columbia Department of Insurance, Securities and Banking, the Financial Services Academy is a public-private partnership designed as a year-round program for students in high school, college and post-graduate programs to train for careers in the financial services industry.
The Academy is comprised of five programs:
1) a Year-Round Internship Program;
2) a Year-Round Externship Program;
3) the Bank on DC Young Money Managers Program (celebrating its 9th year);
4) the DISB SYEP Insurance Internship Program; and
5) the DISB SYEP Securities Internship Program.
The purpose of the academy is to:
- Introduce and expose high school and college students (especially underrepresented students) to the financial services sector;
- Eliminate barriers, like unpaid internships or scarce pre-career opportunities, to allow full student participation in the financial services sector; and
- Build pathways for all communities to successfully gain full-time employment in the insurance, securities and banking industries.
“Mayor Bowser’s vision for inclusive prosperity and financial empowerment includes giving young people the opportunity to pursue careers in the insurance, securities and banking fields,” said DISB Commissioner Karima M. Woods. “Initially focused on opportunities in the insurance field, I am excited to expand the Financial Services Academy to include internships in securities and banking as well as other areas within the Department such as risk finance.”
Financial Services Academy partners include:
Department of Insurance, Securities and Banking (DISB): The lead agency on the Financial Services Academy, DISB has a three-fold mission: (1) cultivate a regulatory environment that protects consumers and attracts and retains financial services firms to the District; (2) empower and educate residents on financial matters; and (3) provide financing for District small businesses.
Department of Employment Services (DOES): Through the DOES Marion Barry Summer Youth Employment Program, DISB offers local youth paid summer internships and introduces them to the financial services industry.
DC Public Schools (DCPS) and the Office of the State Superintendent of Education (OSSE): DISB is partnering with DCPS and OSSE through the DC Career Academy Network, a locally funded program established to strengthen the pipeline to college and careers through work-based learning.
Local Colleges and Universities: Through the Financial Services Academy, DISB partners with Gallaudet University to provide deaf and hard of hearing students with internships in the Department’s Insurance Bureau. DISB is exploring partnerships with additional local colleges and universities that will include internships, recruitment opportunities and speaking engagements.
"DISB has been an invaluable partner with Gallaudet University, providing internships to students in our risk management and insurance program since 2016. The internships have allowed students to learn about real life insurance issues, become problem solvers and learn how insurance regulation plays a vital role in protecting and educating consumers. The interns have gone on to work for insurance companies and brokerage firms and pursue graduate school degrees," said James Bruner, Executive Director for the Gallaudet University Maguire Academy of Risk Management and Insurance.
Local Industry Organizations: During the summer internship programs, local industry partners will be invited to participate in a speaker series, sharing their experience and organization’s work in the financial services industry. Post-COVID-19, there will also be an opportunity for youth to conduct site-visits at the offices of industry partners. Additionally, partnerships will provide access to internships and career opportunities for students participating in the Financial Services Academy.