When a fintech wanted to test a new product in several countries at once, it had to deal with each country's regulator separately. In 2019, the UK's Financial Conduct Authority brought regulators together to make that easier. The network now has more than 70 members.

The dilemma

By 2018, regulatory sandboxes were everywhere. The UK had launched the first one in 2016, and dozens of countries had built their own versions. But each sandbox stopped at the national border. A fintech firm that wanted to test the same product in three countries had to apply to three regulators, meet three sets of conditions, and explain itself three times. There was no guarantee that any of those regulators would treat the firm the same way. Digital products move across borders easily. Regulatory cooperation does not. The gap between the two was growing.

The regulatory gap

What was needed was a way for regulators to work together on cross-border tests without giving up their own authority. Regulators needed somewhere to share what they were learning from their national sandboxes, agree on common questions worth testing across countries, and give firms a single pathway into multi-country pilots. It had to be voluntary, because formal agreements between financial regulators take years and often fall apart.

The approach

In January 2019, the UK's Financial Conduct Authority launched the Global Financial Innovation Network, known as GFIN. The launch followed a public consultation in 2018 that drew around 50 responses from industry, civil society, and consumer groups. GFIN offered firms a three-step pathway. First, a firm entered its own national sandbox. Second, it joined a GFIN cross-border test group, where each participating regulator reviewed the firm under its own laws. Third, regulators shared what they learned after the test was over. The reasoning was that voluntary cooperation, structured around common questions, would deliver more than trying to harmonise rules across countries. Past attempts to harmonise financial regulation had repeatedly stalled.

Results achieved

GFIN has grown to more than 70 financial regulators and observer institutions across multiple regions. The network has run cross-border test groups in waves, each focused on a specific theme such as anti-money-laundering, sustainable finance, and cross-border payments. Over time, the network has become as much a place for regulators to learn from each other as a service for fintech firms.

Two limits are worth noting. The cross-border tests have produced more learning for regulators than commercial growth for firms. A fintech that succeeds in a GFIN test still needs full national licences in every country where it wants to operate. GFIN reduces the friction of cross-border testing, but does not remove it.

The transferable lesson

International regulatory cooperation tends to fail when it tries to make countries agree on the same rules. It works better when it gets countries to ask the same questions. GFIN does not produce a single rulebook for all its members. It produces a shared way of testing and a shared habit of comparing notes afterwards. That is what makes the cooperation useful even when each country's laws remain different.