The banking regulators of seven US states have agreed to standardise and simplify the licensing process for financial technology (fintech) companies.
The simplification of the licensing process is expected to enable the fintech companies to offer its services across the country.
Currently, such companies need to procure licence from every individual state to conduct business.
Under the new initiative, the US states of Georgia, Illinois, Kansas, Tennessee, Texas, Massachusetts and Washington will accept each other findings while approving the money service business licenses of the respective fintech companies.
New start-ups utilise the money business licenses to provide variety of financial services. The new initiative is expected to facilitate the licensing application procedure saving time and money.
Conference of State Bank Supervisors president and chief executive John Ryan in a statement said: “This MSB licensing agreement will minimise the burden of regulatory licensing, use state resources more efficiently, and allow for broad participation by other states across the country.”
Currently, a new advisory panel has been set up, while a technical platform for licensing and supervision is currently under development.
Other US states are also expected to join this initiative.