The Chancellor launched the long-awaited Financial Services Growth and Competitiveness Strategy as part of her Mansion House speech on 15 July, announcing significant reforms to the UK’s financial system.

The ‘Leeds Reforms’ represent the first phase of the government’s plans to make the UK “the top global destination for financial services by 2035”, and include actions to boost retail investment; reduce regulatory burdens that ‘stall inward investment and slow growth’; and capitalise on the opportunities offered by FinTech. 

ICAEW’s Chief Executive Alan Vallance welcomed the strategy and the planned reforms. He said: “The plan demonstrates that government has listened to the financial services sector and will be making changes to deliver better, simpler and more proportionate regulation. 

“Steps to refine regulatory overlap and make regulators more service-minded will help deliver growth, as will measures to stimulate growth by opening up capital markets and financing.”

Regulation for growth

Ahead of the announcements, ICAEW urged the government to take action to reduce the overlap between regulators, streamline data collection and ensure rules are applied proportionally.

The government’s plans include actions to:

• Refocus the work of the Financial Services Ombudsman (FOS), providing clearer delineation with the Financial Conduct Authority (FCA).
• Streamline the Senior Managers and Certification Regime to reduce the number of roles needing regulator pre-approval by 40%.
• Review the FCA’s Customer Duty Rules and how they apply to wholesale firms.
• Remove duplicate processes at regulators, including reviewing how to “rationalise” reporting requirements. 
• Reduce compliance burden relating the factors that regulators much “have regards to” rather than form a regulatory requirement. 

ICAEW had also called for a more service-oriented mindset, treating financial services organisations more like ‘customers’ needing support. The announcements include changes to cut times for authorisations and approvals, the creation of a “scale-up unit” to enhance FCA and PRA engagement with innovative firms and a new dedicated concierge service offering international investors wanting access to the UK’s financial services sector, a one-stop shop for support.

Responding to the proposals, Vallance said: “Regulatory overlap and a well-meaning but overly cautious approach have risked holding back growth. We are pleased to see the ambition set out in this plan but further details and a clear plan for delivery are key.”

Unlocking investment

The Chancellor’s Leeds Reform announcements also outlined government plans to ‘unlock’ investment opportunities across the financial system. The plans include pledges to free up capital from banks via reforms to raise the MREL (minimum requirement for own funds and eligible liabilities) threshold and changes to the ring-fencing regime – which separates banks retail and investment activities.

On the retail side, an industry-led campaign will promote investment opportunities to individual savers and encourage a shift from ‘low-return current accounts to higher performing stocks and shares investments’.

There will be a project with the FCA to overhaul the financial advice and guidance that consumers can access. From April 2026 long-term asset funds will be moved into stocks and shares ISAs.

Four more areas of focus

Alongside offering more details on its plans to deliver a competitive regulatory environment, the government’s Financial Services Growth and Competitiveness Strategy outlines five other key areas of focus.

1. Harnessing the UK’s global leadership in financial services 

This covers how the government aims to enhance cross-border flows of finance and access to global markets, including through free trade agreements with tailored financial services agreements.

It also considers future growth opportunities for the sector, such as expanding the transition finance market and driving forward investment in net-zero. 

2. Embracing innovation and leveraging the UK’s FinTech leadership 

This section covers how the government plans to enable financial services firms to innovate, as well as encourage the wider economy to invest and embrace FinTech. Aims include making the UK the “best place in the world” to invest in AI and to scale a business.

Plans include ensuring financial services become a priority area for research and development funding, the appointment of an AI champion in financial services, and up to £12m investment in data sharing infrastructure. 

3. Setting the UK’s financial services sector up with the skills and talent it needs.

Without the right people, the sector will not be able to grasp the opportunities outlined elsewhere in the strategy. Here the government confirms that it plans to revisit several visa regimes to broaden access, as well as streamlining visa processes. 

The government also makes pledges to boost skills within the UK financial services sectors, with plans to encourage collaboration within the sector on skills, the commissioning of a report into AI skills needs and training, and the creation of more apprenticeship options. 

4. Realising the economic potential of financial services clusters.

Aligned with ICAEW’s recommendations to government on growth, the strategy considers how the financial services sector can lean into its regional areas of expertise from asset management in Edinburgh, to Fintech in Cardiff and insurance in Norfolk. 

The plans confirm the Office for Investment’s concierge service will aim to build on regional strengths while promoting the UK to international investors, while the regulators scale-up unit will work with regional industry groups.