Unleashing growth - what is needed to ensure UK financial services is globally competitive

The discussion was particularly timely given the government’s objective to drive economic growth and enhance the UK’s international competitiveness. With financial services playing a central role in capital markets, investment, and productivity, participants examined how regulation, supervisory culture, and engagement practices can better support these ambitions without compromising market integrity or consumer protection. The House of Lords Financial Services Regulation Committee recently released their report on the PRA and FCA’s secondary competitiveness and growth objective, which provided an essential backdrop to the discussion.

Key takeaways

• Regulatory stability was seen as foundational to sustainable growth and competitiveness
• The UK remains a global financial centre but must adapt faster to maintain its edge
• Simplification, proportionality, and supervisory clarity are high priorities for reform
• Smaller firms face structural barriers to engaging in regulatory policy development
• Ambiguity in applying regulation to innovation and AI is constraining adoption
• Trust, transparency, and public access to data are central to effective consumer protection
• Stronger coordination between government, regulators and businesses is needed to advance economic growth

Forvis Mazars’ Reflection

The UK’s role as a global financial centre depends on forward-thinking regulation that fosters innovation without compromising trust. Leaders agreed that the regulatory environment must evolve with technological change and support firms of all sizes, while also reducing unnecessary burdens and enabling financial services firms to thrive.

There is an urgent need for further simplification and a clearer articulation of what competitiveness means in regulatory practice. Continued nurturing of innovation—particularly in the context of AI and fintech—is also essential. While the UK’s principles-based regulatory approach has been effective, greater clarity, speed, and investment are needed to strengthen its position as a top global hub for innovation in financial services.

The UK is currently well-positioned between a more bullish and ambiguous regulatory path in the US and a slower, more complex one in the EU. This presents a real opportunity to demonstrate a credible, agile, and principles-based model. However, delivery—not just intent—will determine whether the UK strengthens its global position or risks falling behind.

Continued collaboration between industry, policymakers, and regulators is key to building a resilient, transparent, and inclusive ecosystem. Forvis Mazars remains committed to this dialogue and thanks Baroness Bowles and all participants for their insights.

Summary of discussion by theme

Regulatory environment

Participants broadly agreed that a stable and predictable regulatory framework is essential for growth. The idea of a binary trade-off between growth and regulation was rejected; instead, there was a call for “smart regulation” that supports innovation, reduces unnecessary burdens, and enables financial services to thrive. It was acknowledged that the UK starts from a strong global position but must act decisively to stay ahead of faster-moving jurisdictions. While regulators pointed to ongoing work to streamline authorisations and reduce data burdens, firms emphasised the need for further simplification and a clearer articulation of what competitiveness means in regulatory practice.

Interactions with the regulators

Several participants, particularly from industry, raised concerns about inconsistent supervisory experiences and cultural barriers to open engagement with regulators. It was noted that smaller firms often lack the capacity to engage meaningfully in consultation processes, and there was discussion about how to ensure their voices are heard. Regulators acknowledged this challenge and highlighted recent efforts to widen participation through panels, sandboxes, and one to one outreach, but agreed that more could be done to create a consistent and constructive experience, especially for firms navigating growth thresholds or cross-sector regulation.

The role of technology in financial services

There was a strong focus on the UK’s role in supporting innovation, especially in AI and fintech. While some praised the UK’s measured, principles-based regulatory approach, avoiding premature rule-making, others argued that a lack of clarity was deterring investment and adoption. One panellist noted that their sandbox and recent AI initiatives were highlighted as positive developments, but the need for greater speed, and investment, was also discussed. Concerns were raised about whether smaller firms and new entrants have the resources to engage effectively with emerging technology frameworks, and how regulation can remain proportionate as these markets evolve.

Trust, transparency and consumer protection

Trust was a recurring theme across multiple topics, and one that most panellists echoed. From the reliability of financial information to the clarity of regulatory communications, participants noted the need for a system that delivers transparency and fairness. Discussion touched on the need for stronger consumer-facing tools (such as improved registers and disclosure mechanisms) as well as clearer guidance around the application of the Consumer Duty. There was also recognition, especially from a political perspective, that uncertainty about regulatory expectations can stifle innovation and risk-taking, with calls for more proactive guidance on what constitutes “good” versus “bad” conduct under evolving regimes.

International positioning

The UK’s ability to attract international firms and investment was linked to its regulatory predictability, infrastructure strength, and global partnerships. Some participants noted that while few explicit regulatory barriers exist, the broader “friction” of the business environment, including tax complexity, procedural uncertainty, and lack of a clear single point of regulatory entry, can all deter international growth. There were positive examples of international collaboration, including joint regulatory initiatives and sandboxes, but a call for more coordinated and visible messaging to signal that the UK is “open for business.”

SME market access

A number of participants highlighted systemic barriers to finance for smaller firms, including both structural gaps in the banking sector and risk aversion in lending practices. While regulators pointed to survey data suggesting limited SME demand for external capital, others argued that trust in lenders is low and that alternative models like regional or community banks, have been underdeveloped. The lack of a clear ownership or policy on SME finance within government was noted as a persistent barrier to systemic improvement.