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| 3 minute read

UK puts growth at heart of financial services strategy

The UK Government has published a Financial Services Growth and Competitiveness Strategy. The Strategy, which was launched as part of the Leeds Reforms, sets out the Government’s plans to grow the financial services sector over the next ten years.

The Strategy is structured around five areas of focus:

  1. Delivering a competitive regulatory environment
  2. Harnessing the UK’s global leadership in financial services
  3. Embracing innovation and leveraging the UK’s fintech leadership
  4. Building a retail investment culture and delivering prosperity through UK capital markets
  5. Setting the UK’s financial services sector up with the skills and talent it needs

1. Regulatory environment

The Government’s vision is for the UK’s financial services regulatory environment to be proportionate, predictable and internationally competitive. The Strategy picks out specific measures intended to reduce regulatory burdens and support growth and competitiveness.

Proposals include:

  • Streamlined SMCR: The Certification Regime will be replaced by more flexible regulator-made rules and the number of senior manager roles will be reduced.
  • FOS reform: The Government is consulting on aligning the Financial Ombudsman Service with the Financial Conduct Authority.
  • Consumer Duty: The FCA will report to the Government on the application of the Consumer Duty for wholesale firms.
  • Basel 3.1: The PRA is delaying modelling requirements for market risk to 1 January 2028.
  • Ring-fencing: A report in early 2026 will suggest options for further reform of the ring-fencing regime.
  • Asset management: The Government will put forward the next phase of streamlining the Alternative Investment Fund Managers Regulations in early 2026.
  • Captive insurance: A bespoke regime will be introduced for entities that insure or reinsure the risk of other companies in the same group.
  • Shorter deadlines: Deadlines for new firm authorisations and variations of permission will be cut by two months; deadlines for the appointment of senior managers will be cut by a month.
  • Start-up support: The Government will consult in the autumn on a new authorisation regime for innovative firms, allowing them to provide limited regulated activities with streamlined conditions.

2. Global leadership

The Government commits to retaining an open and connected financial services sector which upholds international regulatory standards. The Strategy notes the steps the Government is taking to boost financial services trade.

Steps include:

  • Overseas recognition: Draft regulations create a framework for HM Treasury to recognise overseas regulatory regimes as achieving similar outcomes to the UK’s.
  • International concierge: Launching in October 2025, a new Office for Investment: Financial Services will help international firms navigate the UK regulatory landscape.
  • Sustainable finance: Government initiatives include a consultation on guidelines for credible transition finance ahead of COP30 and engaging with the regulators on a transition finance pilot, but not proceeding with the development of a UK Green Taxonomy.
  • UK-Swiss relations: The Government promises to implement the Berne Financial Services Agreement with Switzerland by the end of the year.

3. Fintech

The Government’s vision is for the UK to be the world’s most technologically advanced global financial centre and a leading jurisdiction for fintech firms to start up, scale and list. It acknowledges that the UK needs to do more to enhance its offering as a place to innovate.

Measures include:

  • Open finance: The FCA is going to launch a Smart Data Accelerator to test open finance use cases and will lay out an open finance roadmap by March 2026.
  • Digital identity: The Government promises to work with regulators to help the financial services industry benefit from digital verification services under the Data (Use and Access) Act 2025.
  • Payment services: The Government plans to modernise the regulation of payment services and e-money, including to respond to stablecoins.
  • AI Champion: The Government will appoint a champion for the adoption of AI in financial services.
  • Scale-Up Unit: The FCA and PRA will launch a unit to improve engagement with fast-growing, innovative regulated firms.

4. Retail investment

The Government recognises that the UK currently has the lowest rate of retail investment in the G7. To address this, the Government encourages the industry towards informing, rather than warning, consumers about the benefits and risks of investing.

Actions include:

  • Ad campaign: An industry-led campaign will promote the benefits of retail investment.
  • ISAs: Long-Term Asset Funds will be made available under the Stocks & Shares ISA from April 2026.
  • Targeted support: The FCA will introduce a new regime for giving more affordable advice to consumers by April 2026.
  • Prospectus regime: The FCA’s new prospectus regime will go live in early 2026.
  • Capital markets: The Government plans ongoing reform of MiFID, the Benchmarks Regulation and EMIR. The FCA will also propose potential reforms to the Investment Firms’ Prudential Regime (IFPR) before the end of the year and consult in 2026.

5. Skills and talent

The Government says that it is “doubling down” to attract top international talent. Measures include widening access to certain visa routes, streamlining the visa process and setting up a new Global Talent Taskforce for top talent to make a smooth transition into the UK.

The Government also seeks to develop the skills system. Ideas include inviting the Financial Services Skills Commission to report on training needs for AI in financial services and launching a Financial Services Skills Compact in summer 2026.

Read our blogpost for more on Mansion House 2025 and the “Leeds Reforms”

By 2035, the UK will once again be the global location of choice for financial services firms to invest, innovate, grow, and sell their services throughout the UK and to the world.

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leeds reforms, mansion house, uk, banking, fintech, fsma 23 smarter regulatory framework, payments, securities, insurance, funds, capital requirements