Government Initiatives Aim to Boost UK Fintech Growth & Regional Investment
The UK government has announced a series of measures designed to strengthen the nation’s financial services sector,foster economic growth,and support working people. Central to these efforts is the launch of a new Scale-up Unit, jointly led by the financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), to provide tailored support for rapidly expanding financial firms.
Initially focused on fast-growing deposit-takers and insurers,the Scale-up Unit will expand to include fintechs in the coming year. It aims to address a key challenge identified by the industry – navigating complex regulations - allowing firms to concentrate on innovation and growth. This initiative directly responds to findings from Sir Ron Kalifa’s 2021 Review of the Fintech sector, which highlighted a £2 billion funding gap hindering the scaling of UK fintech companies.
Alongside the Scale-up Unit, the government is hosting a “Sprint” event, bringing together industry representatives, investors, and regulators to proactively identify and remove barriers to scaling innovative, regulated financial firms across the UK.
These announcements build upon existing strategies like the Mansion House Reforms and the Leeds Reforms, all geared towards bolstering the UK’s position as a global financial and technological hub and driving growth in all regions. The Chancellor’s commitment to financial services growth in Leeds and Yorkshire has been notably welcomed by industry leaders.Hiroki Takeuchi, CEO of GoCardless, whose company recently opened a ‘Northern Hub’ office in Leeds, stated the streamlined regulatory guidance will enable firms like his to accelerate growth plans.
The impact of these initiatives is already being seen, with over £110 billion in commitments from global financial services companies in the last month. this includes a £3 billion investment by Revolut, leading to the opening of their new headquarters in Canary Wharf and the creation of 1,000 jobs.
Nikhil Rathi, Chief Executive of the FCA, emphasized the institution’s commitment to supporting growth and maintaining the UK’s attractiveness for financial firms. Sam Woods, CEO of the PRA, echoed this sentiment, stating the new unit will foster a competitive landscape by offering tailored regulatory support to scaling companies.
The UK currently boasts over 3,000 fintech firms, employing over 75,000 people and attracting over $3.6 billion in investment in 2024 alone. These initiatives are part of the government’s broader “Plan for Change,” focused on economic growth, job creation, and increasing financial security for working people.
