Financial services regulators from 12 countries are looking at how they can work together to balance the benefits of innovation with traditional policy objectives, proposing a "global sandbox" for international testing.
The Australian Securities and Investments Commission (ASIC) believes the creation of the Global Financial Innovation Network (GFIN) would provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale.
As the Global Financial Innovation Network (GFIN) Consultation document [PDF]states, the GFIN would create a new framework for cooperation between financial services regulators.
Detailing three main functions of the GFIN, the consultation document explains that the new sandbox would see the network of regulators work together and share experience of innovation in respective markets, including emerging technologies and business models; provide a forum for joint policy work and discussions; and provide firms with an environment in which to trial cross-border solutions.
"The proposal for a Global Financial Innovation Network is a really important concept for regulators like ASIC who are actively engaged in understanding and harnessing the benefits of innovation in financial services for consumers while managing the potential harm," ASIC Commissioner John Price said.
"There is great potential through a group like the GFIN to help share the experiences and knowledge from across different markets, while also providing a platform for innovative firms wishing to scale their propositions via testing in multiple countries."
ASIC already works alongside a handful of overseas counterparts, most recently signing a cooperation agreement with the Dubai Financial Services Authority (DFSA) to provide mutual understanding on financial innovation in each jurisdiction.
This followed a partnership ASIC already had with the UAE's Abu Dhabi Global Market Financial Services Regulatory Authority that aims to provide mutual support to fintech businesses seeking to operate in each other's markets.
ASIC also has an agreement with the China Securities Regulatory Commission (CSRC) that allows both parties to share information that will enable the regulators to maintain visibility over regulatory and relevant economic or commercial developments that occur in each other's markets.
Australia's financial watchdog in June last year similarly announced the completion of a framework for cooperation with the Japan Financial Services Agency, aimed at promoting innovation in financial services in both countries.
It followed the commission kicking off an arrangement with the Hong Kong Securities and Futures Commission earlier that month to provide mutual support to fintech businesses from Australia and Hong Kong seeking to operate in each other's markets.
Meanwhile, Singapore and Australia have been working on a deal to better support cross-border collaboration between fintech startups in both countries.
ASIC has also partnered with Indonesia, Kenya, Malaysia, Canada, the UK, and Switzerland, touting fintech innovation as its purpose.
The consultation is seeking input on the mission statement for the GFIN, its proposed functions, and where it should prioritise activity.
With consultation closing on October 14, 2018, the consortium is also keen to hear from other interested regulators or related organisations that wish to get involved.
PREVIOUS AND RELATED COVERAGE
The UK-Australia FinTech Bridge was announced by UK Chancellor of the Exchequer Philip Hammond at Thursday's International FinTech Conference in London.
Although fintechs are a small part of the financial system, a draft report into Competition in the Australian Financial System has said they represent a group that could 'fundamentally' change the nature of competition.
Why Westpac is making 'frenemies' with fintechs (TechRepublic)
The bank's CIO has used the term 'frenemies' to describe the relationship Westpac has with the fintech community down under.