Chancellor unveils plans to 'supercharge' growth of innovative financial services firms
Chancellor announced this new support at conference of investors, financial services bosses and local leaders to accelerate regional growth.
- Chancellor visited Leeds – the second largest financial services centre into the UK - to launch new Scale-up Unit for high potential firms.
- Expert and bespoke support delivered by the new Scale-up Unit will help banks, insurers and fintech firms expand faster, create well paid jobs and attract investment.
Financial services firms will get new support to help them scale up, invest and create high-skilled jobs – as the Chancellor doubles down on growth as her top priority by making it easier for innovative businesses to grow.
Speaking at a conference of regulators and business leaders in Leeds to boost regional growth today (24 October), Rachel Reeves announced that scaling banks and insurers will be given bespoke support to navigate rules and regulation – tearing down a key barrier to them growing and investing as part of the government’s modern Industrial Strategy.
The new unit, which will also work with other scaling financial services firms like fintechs from early next year, will give businesses a clear point of contact with the Financial Conduct Authority and Prudential Regulation Authority. This will make it simpler for firms to get timely responses to regulatory queries and access expert support – so that entrepreneurs can focus on developing new products, hiring staff, and bringing investment into local economies.
Chancellor of the Exchequer, Rachel Reeves said:
I am proud to be back in Leeds, home to the second largest financial services centre in the UK, to launch our new Scale-up Unit – which will super charge the growth of some of our most innovative companies.
But the vast number of rules make life complicated for these businesses. We are helping them cut through the noise, to grow and innovate. That’s how we will boost jobs, boost growth, and build an economy that works for, and rewards, working people.
Hiroki Takeuchi, CEO of GoCardless – who recently opened a new office in Leeds for their ‘Northern Hub’ - said:
The Chancellor’s commitment to the growth of financial services in Leeds and across Yorkshire is hugely welcome.
Accessing clear regulatory guidance is a key hurdle for fintechs bringing new innovations to market. Streamlining the process will make it easier for firms like GoCardless to concentrate on serving customers and accelerating our growth plans, including our new ‘Northern Hub’ office in Leeds.
The announcements build on the government’s wider work to strengthen the UK’s position as a global hub for financial services and technology, including unlocking more private investment through the Mansion House Reforms and supporting growth in every region through the Leeds Reforms.
These changes are already driving more investment into the UK, with over £110 billion committed by global financial services companies in the last month. This includes global Fintech leader Revolut opening its new headquarters in Canary Wharf, as part of a £3 billion investment over the next five years that will create 1,000 jobs.
Nikhil Rathi, Chief Executive of the Financial Conduct Authority said:
We’ve committed in our strategy to supporting growth and ensuring the UK remains the premier destination for financial firms to start up and grow. By joining up with the PRA, our new Scale-up Unit will provide firms with tailored, hands-on support to help them scale and grow faster.
Sam Woods, CEO of the Prudential Regulation Authority, said:
In line with our objective to facilitate UK growth and competitiveness, this new unit will encourage a dynamic, competitive landscape in financial services by offering tailored support to firms on how to navigate regulation while scaling up.
More information
- The Scale-up Unit will be jointly led by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).
- The service will open initially for fast-growing deposit-takers and insurers, before expanding to serve other financial services firms including fintechs next year.
- The Unit will provide dedicated resource for fast-growing firms seeking support as they expand.
- The Sprint event will bring together industry, investors and regulators to identify and address barriers to scaling innovative and regulated financial firms in regions across the UK.
- FinTech firms widely cite navigating regulation as a key barrier to scaling which can inhibit investment into growing firms. The Unit will help give firms the regulatory clarity they need to support their scaling ambitions and help unlock the investment needed to plug the £2 billion FinTech scale-up funding gap which was cited in Sir Ron Kalifa’s 2021 Review of the Fintech sector.
- To help further tackle this funding gap, the government also welcomed as part of the Financial Services Growth and Competitiveness Strategy work from the City of London Corporation and the British Business Bank to facilitate greater access to finance and commercial opportunities for fast-growing Fintech firms.
- The UK is home to more than 3,000 fintech firms, employing over 75,000 people nationwide, and attracting over $3.6 billion in investment in 2024 alone.
- Both initiatives form part of the government’s Plan for Change – going further and faster to grow the economy, create good jobs and put more money in people’s pockets.