Allowing start-up banks to enter the financial markets sooner than ever will encourage greater competition, Treasurer Scott Morrison hopes.

He’s introduced legislation to parliament that he says will transform the banking landscape by making changes to ownership restrictions for banks, credit unions, building societies and insurance companies, and by allowing start-ups to gain restricted licenses for two years to prove themselves.

‘Today’s bill significantly reduces barriers to entry that are preventing the innovation that our financial system needs while still prioritising the safety of customers and the broader financial system,’ he said.