The UK’s 2035 Vision for Financial Services: Policy, Reform, and Opportunity
In her Mansion House speech, Chancellor Rachel Reeves outlined the new direction for the UK’s financial sector. The government signalled a shift toward more risk-tolerant regulation, designed to support innovation and competitiveness.
The Chancellor also released the Leeds Reforms and with it, a very ambitious objective: make the UK the number one global destination for financial services by 2035. Delivery will focus on three core pillars:
Unlocking investment capital through both institutional and retail, by making investment services more accessible to savers and for businesses to access funding.
Simplifying regulation to accelerate licensing timetables, reduce reporting obligations, and adapt alongside innovation.
Promoting innovation through policy designed to support through the full lifecycle of a financial services firm, and a dedicated concierge service to aid international investors.
What’s changing: headline regulatory reforms
The Mansion House announcements were accompanied by a wide-ranging set of reforms and policy papers. Here are the most notable shifts:
Retail investment reform
Banks will be allowed to notify savers of specific investment opportunities, based on financial assets.
The FCA will incentivise ISA savings users to move their assets into more productive investments through their “Targeted Support Regime”, set to go live in Spring of 2026.
Long-Term Asset Funds (LTAFs) will now be eligible for Stocks & Shares ISAs, widening access to growth-oriented assets.
A national advertising campaign will promote investing with major financial institutions.
Regulatory simplification
The Senior Managers & Certification Regime will be streamlined, reducing compliance costs and complexity.
A review of the Financial Ombudsman Service (FOS) will bring its operations into closer alignment with FCA rules and address concerns raised by the consumers and businesses.
The application of Consumer Duty to wholesale firms is under review, addressing concerns about regulatory overreach.
More broadly, red tape will be cut across onboarding, authorisations, and operational oversight.
Capital & competitiveness
The Minimum Requirement for Own Funds and Eligible Liabilities (MRE)L thresholds will be raised, freeing up billions in capital for banks to lend and invest.
The Basel 3.1 implementation will be staged to protect UK competitiveness, particularly in investment banking.
Ring-fencing rules will be reviewed to better balance financial stability with economic growth.
Fintech & innovation
A concierge service for international investment firms will be established within the Office for Investment.
Firms will benefit from a single regulator point of contact during scale-up.
The British Business Bank’s lending capacity has been increased to £25.6bn to support growth-stage companies.
Talent will be cultivated through initiatives such as the TechFirst PhD programme and a Global Talent Taskforce.
What these changes signal
The Mansion House and Leeds Reforms are a direct response to long-standing challenges raised by the financial services sector. It sets out the UK’s regulatory approach to financial innovation over the coming decade.
Licensing delays are being tackled head-on
One of the clearest signals is the government’s intention to legislate statutory deadlines for regulatory authorisations. The current licensing process creates delays and uncertainty for start-ups looking to access funding rounds. Through the “L-plate licence” model, start-ups will be allowed to operate under limited conditions while progressing through full authorisation. For scaling firms, this would remove critical blockers in go-to-market timelines.
The Regulatory Environment – Cross-Cutting Reforms consultation further supports these ideas, as it outlines:
Faster application triaging and clearer eligibility tests
Greater use of automated processes to reduce case-by-case burden
Improved transparency around application progress and regulator communication
A dedicated scale-up unit for high-growth fintechs
The FCA and PRA will launch a new scale-up unit, offering dedicated regulatory support for fast growing fintechs. The unit would help address the issues fintechs face when moving on from a sandbox and losing access to support.
The Financial Services Growth and Competitiveness Strategy also proposes:
Closer coordination across FCA teams engaging with a single firm
More consistent supervision models for firms growing beyond initial licence scope
Onboarding pathways tailored for global fintechs entering the UK market
Smarter compliance, not just lighter
Reforms to the Senior Managers & Certification Regime (SMCR) and the Financial Ombudsman Services (FOS) will also have a deep impact for both startups and scale-ups:
The SM&CR reforms reduce the number of roles requiring FCA approval and shorten the timeline for approval decisions, crucial for lean teams hiring senior talent quickly.
The FOS consultation proposes a reset of its role, narrowing its interpretation to more clearly align with FCA rulebooks. This brings predictability back to dispute resolution, a major concern for VCs and legal teams managing firm reputation risk.
Regulatory clarity leads to commercial opportunity
The Mansion House reforms represent a structural shift in how the UK government engages with financial services firms, ushering in a more dynamic, growth-oriented environment. At Braithwate, we see this as a strategic opportunity.
We recognise the immense potential of the UK financial market, and this is why we developed FintechXpndr (FXp), in collaboration with HM, our Singapore-based partners. FXp is specifically designed for fintechs aiming to expand into new jurisdictions. This evolving regulatory shift could unlock faster expansion, deeper capital access, and a stronger foothold in one of the world’s most ambitious financial hubs.
Get in touch to discover how FXp can support your licensing journey and accelerate your UK expansion.
