Economic growth at the forefront of policy
Boosting economic growth has become the defining objective of the Labour Government’s approach to policy and regulation, with financial services positioned as a key sector in meeting this ambition.
Over the past year, this focus has translated into a series of regulatory and policy interventions designed to enhance competitiveness, unlock investment, and recalibrate the balance between consumer protection and market participation.
Throughout 2025, cross-cutting developments across banking, payments, asset management and insurance have highlighted this direction of travel.
The publication of the Financial Services Growth & Competitiveness Strategy in July provided a clear statement of intent, while the decision to abandon plans for a UK Green Taxonomy signalled a pragmatic divergence from the EU’s approach to sustainable finance. While Brussels continues to embed its Taxonomy, both jurisdictions remain aligned in their pursuit of growth – or ‘economic competitiveness’, as it’s often framed at the EU level.
Capital markets reform has been a particular area of focus of late, with the UK Government and the Financial Conduct Authority (FCA) establishing a ‘Private Intermittent Securities and Capital Exchange System’ (PISCES) in May 2025. This is a new framework allowing private company shares to be traded on an intermittent basis.
The Chancellor’s 2025 Autumn Budget announcement of a three-year Stamp Duty Reserve Tax (SDRT) exemption for newly listed firms exemplified efforts to make London listings more attractive. However, many in the industry believe this change will have limited impact on boosting the number of UK companies choosing to go public at home, compared with listing in jurisdictions with more liquid markets and deeper capital pools – most notably the US.
Facilitating investment through targeted support
On the consumer side, the FCA is seeking to empower and improve outcomes through the introduction of a new “targeted support” regime.
Emerging from the Advice Guidance Boundary Review, the regime is designed to bridge the long-standing gap between generic guidance and full regulated advice. It will allow firms to provide tailored, non-individualised recommendations to defined groups of consumers with shared needs.
For example, firms could encourage individuals with significant cash holdings to invest or support consumers making key pension decisions – without the cost and complexity of full advice.
An authorisation gateway for the new permission will open in March, with firms expected to operate within defined product scopes and in line with Consumer Duty standards. That said, initial uptake is expected to be slow as firms grapple with having the systems and consumer data required to accurately segment groups.
Tackling fraud in an interconnected system
Alongside these efforts to promote investment, the Government is also grappling with the challenge of maintaining trust and confidence in the financial system.
An updated National Fraud Strategy is expected in the coming months, with industry debate mostly centred on whether Big Tech and telecommunications firms should bear greater responsibility for fraud originating on their platforms or networks. Innovate Finance estimates that 77% of authorised push payment fraud originates online, particularly via social media and messaging platforms, yet financial reimbursement obligations currently fall exclusively on payment service providers.
While Labour signalled a tougher stance during the 2024 general election campaign, recent indications suggest that the Government will not include any financial reimbursement obligations for tech firms in the upcoming Fraud Strategy. This apparent recalibration reflects not only domestic policy considerations but also wider geopolitical sensitivities, given the US ownership of many major technology platforms and the current Trump administration’s willingness to overtly challenge overseas regulatory changes perceived to disproportionality hinder US interests.
Looking ahead
In 2026, UK financial services will continue the trajectory of looking to balance its drive for economic growth and competitiveness, regulatory clarity in the post-Brexit environment, and facilitating a culture of investment in a nation of savers.
These challenges cut across capital markets and retail investment, impacting the full spectrum of the policy and regulatory framework for financial services ranging from prudential requirements to how firms support their consumers.
Understanding these developments and engaging effectively with policymakers and regulators is key for firms aiming to stay ahead. HM Treasury, in particular, remains open to well-evidenced ideas that support its economic growth agenda, creating a clear opportunity for firms to help shape the policy agenda. Whitehouse is well-versed in providing the expertise and insight needed to do precisely that.
Experts in effecting change
The Whitehouse team are expert political consultants, providing public affairs advice and political analysis to a wide range of organisations in the UK and across the EU, including in financial services.
Whether you’re working in the UK, EU, or both – get in touch with us to discuss how we can support your business.
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