Government and regulators urged to foster growth and expand financial services access
UK Finance has outlined a series of financial sector reforms in its newly published Plan for Growth, which was submitted to the UK government earlier this month.
The industry body is urging policymakers and regulators to take steps that would enhance the financial sector’s role in economic growth while delivering benefits to consumers, businesses, and society.
UK Finance’s Plan for Growth calls for a pro-growth regulatory environment, a financial system that is equipped for the future, and expanded financial services access for consumers and businesses.
Several recommendations from the report have already gained traction. The government has announced plans to integrate the Payment Systems Regulator into the Financial Conduct Authority (FCA) to simplify regulatory oversight. The FCA has also reversed its proposal to publicly name firms under enforcement action, opting instead to retain the existing “exceptional circumstances” test.
Other developments include the FCA’s commitment to simplifying lending rules to support mortgage borrowers and the Prudential Regulation Authority’s plan to raise the retail deposits leverage ratio threshold, a move aimed at fostering financial sector competitiveness. Additionally, the government has pledged to review the Financial Ombudsman Service’s role amid concerns it may be functioning as a quasi-regulator.
The proposals align with the broader Mansion House reforms introduced by the Chancellor in November 2024, which seek to enhance the UK’s financial services industry.
David Postings (pictured), chief executive of UK Finance, emphasised the importance of a supportive regulatory and tax framework to maintain the UK’s global standing.
“Financial services are integral to our economy and to ensure the UK remains a world-leading hub, it needs a regulatory and tax framework that encourages innovation and investment,” he said. “The current discussion about what more regulators could do to support growth and the very constructive way in which they have responded has created the space to consider further reforms.
“We need a careful but decisive move away from regulating for risk, and towards a more modern regulatory framework and internationally competitive environment. We have already seen the government and regulators announce action in line with our asks, and I hope more of the ideas we have set out are taken forward to support growth and benefit consumers and businesses up and down the country.”
UK Finance represents more than 300 banking and financial services firms in the UK, advocating for policies that support industry growth and stability.
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