The Financial Conduct Authority (FCA) has partnered with financial regulators from 11 countries to launch a global regulatory sandbox.
The regulators will create the Global Financial Innovation Network (GFIN) to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas.
It will also create a new framework for co-operation between financial services regulators on innovation, sharing different experiences and approaches.
The FCA has been running its own regulatory sandbox since 2015, allowing firms to trial their innovative services or products in a "safe space" without facing the same regulatory repercussions.
Christopher Woolard, FCA executive director of strategy and competition, said: "The creation of the Global Financial Innovation Network is an important next step for organisations like ours who are actively engaged in understanding and harnessing the benefits of innovation in financial services for consumers, while managing the potential harm.
"The establishment of the GFIN can 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."
The FCA has launched a consultation on the proposals and as part of this it is seeking views from market participants on what the priorities of the GFIN should be.
Following initial consultation, respondents were supportive of the idea of the initiative and said that one of the main advantages for the global sandbox could be reducing the time it takes to bring ideas to new international markets.
The regulator added that feedback highlighted the importance of the project being transparent and fair to those potential firms wishing to apply for cross-border testing.
Jane Jee, chief executive of Kompli-Global, a firm which provides due diligence services, said: "Too many organisations are still using outdated, 20th century protocols to meet complex requirements of 21st century legislation.
"In doing so, they may be failing in their duty to support regulators in tackling the growing threat from financial crime, providing gaps in the system that could be exploited by money launderers. The FCA has a duty of care to remedy this."