An influential group including executives from some of theworld's biggest banks is calling for public-private partnerships tolead the way in developing regulations for the burgeoningfinancial-technology (“fintech”) industry.

Governments and businesses should create bodies that enable themto work together on rules to govern technologies that aretransforming everything from the capital markets business toconsumer payments, the World Economic Forum said in a reportreleased Tuesday. The efforts could help ensure companies don'tescape oversight by slipping though “supervisory cracks,” accordingto the report.

“There is an urgent need both for the private sector andfinancial supervisors to collaborate,” the group said in thereport, whose contributors include investment bank executives,international economists, and entrepreneurs from Asia, the U.K.,and the U.S. The forum's aim is “to foster competition betweentraditional financial players and new entrants while alsopreserving system stability,” it said.

Fintech was a central theme this year at the group's annualmeeting in Davos, Switzerland, and the report draws on discussionsthat took place there. It incorporates views of members includingexecutives from UBS Group AG, Deutsche Bank AG, and JPMorgan Chase& Co.; tech firms such as IEX Group Inc. and On Deck CapitalInc.; and regulators including the U.S. Securities and ExchangeCommission and the Bank of England.

The report comes as regulators around the world scrutinize theexplosive growth of new technologies from online ledgers fortracking digital currencies to peer-to-peer lending and mobilepayments systems. In the U.S., agencies including the TreasuryDepartment and Consumer Financial Protection Bureau have beenstudying ways to bring new systems under existing regulatoryframeworks. In the U.K., the Financial Conduct Authority isdeveloping a system aimed at spurring innovation, including a modelthat allows companies to test new products with guidance fromregulators.

While many fintech firms set out to bypass banks and steal theircustomers, financial firms are increasingly teaming with theseupstarts in addition to developing their own technology-drivenservices. For financial companies, new technologies pose bothcompetitive threats as well as an opportunity to cut costs andbolster profitability.

“A few years ago there was a lot of skepticism about whatfintech could do,” said Richard Eldridge, chief executive officerof the credit score technology company Lenddo, who also contributedto the report. “But today you're seeing a rapid rise in innovationcoming from the incumbents as well. Whether they are working ontheir own innovations or working with or acquiring fintechcompanies.”

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