The UK’s Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) have signed an agreement in order to support innovative businesses in the two countries. The fintech industries in the UK and Australia are estimated to have revenues of around £6.6 billion and £0.7 billion a year, with both growing rapidly.

“Under a world-first agreement, innovative fintech companies in Australia and the United Kingdom will have more support from financial regulators as they attempt to enter the others’ market”, the release said.

Under the agreement, the FSA and the ASIC will refer to one another those innovative businesses seeking to enter the other's market. The regulators will provide support to innovative businesses before, during and after authorisation to help reduce regulatory uncertainty and time to market.

The announcement follows the setting up of Innovation Hubs at the FCA and ASIC in October 2014 and April 2015, respectively, which aimed to help businesses with innovative ideas, navigate financial regulation, support them through the authorisation process and engage with the regulator.

Greg Medcraft, chairman, Australian Securities and Investments Commission, noted that since the launch of their innovation hub, they have seen a rise in requests by fintech startups – robo or digital advice, crowd sourced equity funding, payments, marketplace lending and blockchain business models – seeking assistance about how to navigate the regulatory requirements.

“We believe this agreement with the FCA will help break down barriers to entry both here and in the UK”, Medcraft added.

To qualify for the support, innovator businesses will need to meet the eligibility criteria of their home regulator’s Innovation Hub. Once referred by the regulator, and ahead of applying for authorisation to operate in the new market, the business will have access to a dedicated team or contact person who will help them navigate through the regulatory framework. They will also receive assistance during the authorisation processes with access to expert staff and, where appropriate, the implementation of a specialised authorisation process. Following authorisation, the businesses will have a dedicated contact to turn to for a year.

"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. That is why this agreement – the first of many, we hope – is important”, said Christopher Woolard, director of strategy and competition at the FCA. “With ASIC, we will reduce the barriers for authorised firms looking to grow to scale overseas and to assist non-UK innovators interested in entering the market we oversee”.

In addition, ASIC and the FCA have also committed to share information on emerging market trends and their impact on regulation.