While the sector remains a big success story of the British economy, recent years have seen the emergence and growth of competitor financial centres across the globe and the UK’s financial services sector has not grown as a whole in real terms since 2010. The UK government wants to change that. „By 2035, the UK will once again be the global location of choice for financial services firms to invest, innovate, grow, and sell their services throughout the UK and to the world.„
All starts from payments. The UK government has today (15 July 2025) published the National Payments Vision, setting out its ambitions for the UK’s payments sector to deliver world-leading payments and support the growth mission.
The National Payments Vision sets out the government’s ambitions for a world-leading payments ecosystem which drives innovation, supports competition and ensures security, in line with the Growth Mission.
It established the Payments Vision Delivery Committee (‘the Committee’) to enhance regulatory coordination and drive implementation of key activities – including setting out the approach for the development and delivery of the UK’s retail payments infrastructure needs.
The Committee is supported by a Vision Engagement Group comprising over 30 representatives from the sector.
The Committee has agreed an innovative new model to deliver the next generation of UK retail payments infrastructure, supporting businesses and consumers across the economy. The new model embeds public and private sector collaboration, utilising the right expertise in the right functions to drive transformation. The model also supports short-term activity to enhance resilience and functionality of the existing Faster Payments System, which Pay.UK has been progressing with industry participants.
Delivering this Vision requires collaboration across the entire ecosystem – government, regulators, financial services providers, merchants and consumer representatives. The government is therefore establishing the Payments Vision Delivery Committee to drive next steps, supported by an engagement group comprised of varied representatives from across the sector. This partnership between the public and private sector will be key to achieving a world-leading payments sector that boosts economic growth.
Context
Financial services is one of the largest sectors in the UK economy, employing 1.2 million people across the country. It is also one of the UK’s most internationally facing sectors; the UK is the world’s largest net exporter of financial services and the sector accounts for more than half of the UK’s surplus in services exports.
The UK is one of only two truly global financial centres, with a reach, depth and breadth of activity that makes it a unique and dynamic jurisdiction. The government sees vast potential in the sector, and that is why it has been identified as one of the eight growth-driving sectors in the government’s modern Industrial Strategy, whose success is essential to delivering the Plan for Change.
While the sector remains a big success story of the British economy, recent years have seen the emergence and growth of competitor financial centres across the globe and the UK’s financial services sector has not grown as a whole in real terms since 2010.
The Financial Services Growth and Competitiveness Strategy focuses on delivering a competitive regulatory environment, harnessing the UK’s global leadership in financial services, embracing innovation and leveraging the UK’s Fintech leadership, building retail investment culture and delivering prosperity through UK capital markets, setting the UK’s financial services sector up with the skills and talent it needs, and realising the economic potential of financial services clusters across the UK.
A more competitive UK financial services sector can invest more in the real economy, support consumers in getting better returns on their savings and build on existing specialisms in thriving clusters across every nation in the UK.
Delivering a competitive regulatory environment
The strategy emphasises the importance of a stable, predictable, and proportionate regulatory framework to enhance UK competitiveness. Key reforms include:
. Deliver the most significant reform of the Financial Ombudsman Service (FOS) since its inception, ending its present position as a quasi-regulator – improving fairness and predictability.
. Set new, shorter deadlines for determining applications, to make it quicker and easier to do business in the UK, shortening FCA and PRA application deadlines for new firms and senior managers.
. Reviewing the scope of the Consumer Duty to provide more certainty on its scope and application to wholesale firms.
. Reviewing and reforming the ring-fencing regime to support growth; tailoring bank capital requirements and implementing Basel 3.1 with transitional measures. These interventions aim to balance financial stability with growth and innovation while maintaining high standards and consumer protection.
. Focusing on priority growth opportunities by making the UK the most attractive place for: managing investments; insurance and reinsurance; and continuing our strength as a global leader in sustainable finance.
Harnessing the UK’s global leadership in financial services
Through the strategy the government commits to maintaining an open, globally connected financial services sector by:
. Deepening relationships with advanced and emerging markets, including the EU, US, China, India, and the Gulf.
. Enhancing cross-border financial flows and market access through trade agreements and announcing the implementation of Overseas Recognition Regimes.
. Establishing the Office for Investment: Financial Services to assist international firms in navigating UK regulations and promoting regional clusters.
Embracing innovation and leveraging the UK’s Fintech leadership
The UK aims to be the world’s most technologically advanced global financial centre and to remain a leading jurisdiction for Fintech firms to start-up, scale and list by:
. Prioritising financial services in cross-government innovation support, including increasing R&D funding in financial services, especially in AI.
. Enhancing access to finance for start-ups and scale-ups via initiatives like the FCA and PRA launching a Scale-Up Unit to enhance engagement with fast-growing, innovative, regulated firms.
. Accelerating Open Finance and Smart Data initiatives to improve SME access to finance.
. Appointing an AI Champion for financial services to drive AI adoption and innovation in asset management, wholesale services, and capital markets to support growth, including by improving consumer outcomes.
Building a retail investment culture and delivering prosperity through UK capital markets
The UK government recognises the importance of deep capital markets and is taking forward reforms to:
. Address long-standing risk aversion to retail investment, to the benefit of our citizens, UK capital markets and therefore the wider economy by reforming the financial advice and guidance landscape, promoting investment benefits, and simplifying information for consumers.
. Enable Long Term Asset Funds to be held in Stocks and Shares ISAs to support private firm growth.
. Drive digitalisation of wholesale markets through the Wholesale Financial Markets Digital Strategy, including adopting blockchain and AI technologies. This includes, modernising shareholder frameworks by removing paper share certificates.
. Issuing the first remit letter from the Chancellor to the Financial Market Infrastructure Committee of the Bank of England, which will help create a more dynamic, efficient and digital Financial Services sector.
Set the UK’s financial services sector up with the skills and talent it needs
The strategy emphasises attracting and developing talent by:
. Supporting the development of a sector skills compact through the Financial Services Skills Commission, including the commissioning of a report on the AI skills needed to drive growth and productivity in UK Financial Services.
. Simplifying and expanding visa routes such as the Global Talent visa and High Potential Individual visa.
Realising the economic potential of financial services clusters
The government recognises the importance of regional financial services clusters for national economic growth. Key points include:
Supporting clusters across the UK, from growing Fintech clusters in Leeds and Manchester to the long-established asset management cluster in Edinburgh. This includes investing via the British Business Bank’s Cluster Champions programme and the £500 million Mayoral Recyclable Growth fund.
More details:
THE UK GOVERNMENT – FINANCIAL SERVICES GROWTH & COMPETITIVENESS STRATEGY 2035
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