UK vows to help innovative FS firms with new scale-up unit

Editorial

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Unveiled by the chancellor of the exchequer Rachel Reeves, the scale-up unit will be run by the Financial Conduct Authority and Prudential Regulation Authority, providing firms with bespoke support to navigate rules and regulation.

Initially focused on scaling banks and insurers, from early next year it will also work with fintechs, promising to make it simpler for firms to get timely responses to regulatory queries and access expert support.

Acknowledging that the “vast number” of rules “make life complicated” for scale-ups, Reeves says: “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.”

The scale-up support comes after the government promised similar intensive help for fintechs through the start-up phase, helping them create a proven concept and attract growth funding as part of a effort to make the UK the “fintech capital of the world.”

The government claims it actions are driving investment into the UK, citing Revolut’s £3 billion commitment over the next five years that will create 1,000 jobs.

However, Revolut founder Nik Storonsky has previously expressed frustration at the “extreme bureaucracy” in the country, where it is still, after several years, facing delays in securing a full banking licence.

Nevertheless, industry players have praised the latest step, with Richard Davies, CEO of SME lender Allica Bank, saying: “The new scale-up unit is a positive step that we have actively called for and welcome. It should enable challengers to further support the real economy – and giving banks like Allica more capital certainty to boost lending to the SMEs that power local economies.”