Restrictive regulations must be broken by the Financial Services Big Bang to improve fintech growth


The APPG on challenger banks and building societies released its report on the role financial services can play in driving the leveling up agenda.

It highlights the regulatory intransigence that holds back challenger institutions and stifles competition. Otherwise, The report finds that the big main street banks remain insulated from the forces of competition and that the obsession with preventing regulators from failing has made it impossible for challenger institutions to compete with the big banks on equal footing.

The report’s recommendations include using the current Financial Services Bill in Parliament to deliver a Big Bang of financial services, to break restrictive regulatory practices that enshrine the dominance and market share of major high street banks .

It also calls for breaking the shackles of excessive regulation which disproportionately impact growing challenger institutions, and leveling regulatory thresholds like MREL which are set much lower in the UK than elsewhere in the world and discourage growth. and innovation. .

The APPG recommends that the government takes action to accelerate the growth of fintech and advocates for better financial education in schools, both at primary and secondary level, to help people across the UK make better financial decisions.

Very Hon Karen Bradley The MP, chairman of the APPG on Challenger Banks and Building Societies, said: ‘Leveling is a key government priority and the current cost of living crisis only highlights its importance again. Financial service providers can play an important role, but overly cautious regulation is holding them back.

“Regulators are afraid of failure, which means many are forced to operate with one hand tied behind their back and it doesn’t have to be.

“Both Conservative leadership candidates have made it clear that they want to make important and bold policy decisions. The recommendations outlined in this report are easily implemented within the current Financial Services Bill, are cost neutral and have the potential to bring real and lasting change to communities across the UK.

Dan FrumkinCEO of Subway Bank, added: “The race to the top must go beyond a mere slogan, especially given the current difficult economic climate. If done right, channeling new investment, funding and opportunity will change the fortunes of entire communities. Challenger banks and building societies, including community banks like Metro Bank, are poised to play an important role in this – but our potential continues to be held back as rules and regulations aimed at reducing the risks of larger UK banks are actually preventing the challengers from growing and shaking up the bank for the better. I hope this report will rekindle the debate on improving these rules and pave the way for growth.”

  • Francis Bignel

    Francis is a journalist with a bachelor’s degree in classical civilization, he is particularly interested in North and South America.


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