SYDNEY Financial regulators in Australia and United Kingdom signed a cooperation agreement on Wednesday to help financial technology companies expand into each other's markets, Australia's securities watchdog said.
Financial technology - or fintech - companies use technology to make financial services more efficient. Some fintech innovations include automated financial advice, crowd-sourced equity funding, digital payments and blockchain business models.
Under the agreement, the UK's Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) will refer to one another "innovative businesses" seeking to expand to help break down barriers to entry, ASIC said in a statement.
The global tech revolution is poised to shake up the financial services industry. Fintech industries in the UK and Australia are estimated to have annual revenues of around A$12.5 billion (6.6 billion pounds) and A$1.3 billion respectively, with both growing rapidly.
ASIC said it has dealt with over 75 innovative start-ups including granting 10 licences while the FCA's innovation hub has supported over 200 businesses and authorised 18.
Banks globally are beefing up their fintech operations in response to growing competition from smaller digital rivals. According to estimates from KPMG, over a quarter of current Australian banking industry revenue, or about A$27 billion, was at risk from "digital disruptors".
(Reporting by Swati Pandey; Editing by Richard Pullin)