Fintech companies in Britain and Australia will get more support to enter each others’ markets, as part of a deal reached between the countries’ respective regulators.
The Financial Conduct Authority has signed a deal with the Australian Securities and Investments Commission - which it claims is a world-first - that will see the regulators referring to one another any innovative business seeking to enter the others’ market.
The deal could make it easier for Australian robo-advisers to enter the UK market.
The agreement follows the creation of Innovation Hubs at the FCA and Asic to help businesses navigate financial regulation and support them through the authorisation process.
To date, the FCA’s Innovation Hub has supported more than 200 businesses and the authorisation of 18 of them.
Meanwhile Asic has dealt with more than 75 innovative start-ups including the granting of 10 licences.
Christopher Woolard, director of strategy and competition at the FCA, said: “Innovation in financial services isn’t limited by national borders and so it’s important that we support overseas businesses that have new ideas that could benefit British consumers.
“We also know that many British firms wish to use the UK as a springboard to launch their businesses or products internationally, making them potentially more sustainable challengers.”
To qualify for the support offered by the agreement, businesses will need to meet the eligibility criteria of their home regulator’s Innovation Hub.
In the case of the FCA, this means the business will have to be genuinely innovative, offer a good prospect of an identifiable benefit to consumers and have invested resources in understanding the regulations.
Greg Medcraft, chairman of Asic, said that since it launched its hub last year, there has been a surge in requests by fintech startups seeking assistance. “In particular we have dealt with robo or digital advice, crowd sourced equity funding, payments, marketplace lending and blockchain business models.
Robin Melley, a chartered financial planner with Shropshire-based Matrix Capital, said: “I suppose in principle you cannot fault this but I would imagine it is quite a low priority compared with other things the FCA should be looking at.”