HM Treasury's Plan for Change: A Turning Point for FinTechs and Payment Institutions
By AnyAccount Ltd.
FinTech Advisory | www.anyaccount.org
In a landmark move for UK business, the Chancellor of the Exchequer has unveiled a comprehensive Action Plan to overhaul the UK regulatory landscape, aiming to cut red tape, reduce administrative costs by 25%, and reposition the UK as a global leader in innovation and investment. This forms part of the government’s broader Plan for Change, announced in Downing Street and backed by over 60 growth-boosting measures across multiple sectors.
For FinTech firms and payment institutions, this signals the beginning of a new, more agile regulatory era—less complexity, faster approvals, and greater clarity on the path to innovation and growth.
A Better Regulatory Environment for FinTech Innovation
The reforms offer a decisive shift from what the Treasury has described as an "overly risk-averse, fragmented and duplicative regulatory system," which has held back UK competitiveness, innovation, and investment. For the financial services sector, this means:
Consolidation of regulators: The Payment Systems Regulator (PSR) will be folded into the Financial Conduct Authority (FCA), streamlining oversight for payment firms and ending duplicative reporting or engagement requirements.
More efficient authorisation and supervision: The FCA will extend pre-application support to all wholesale payments and crypto firms, and will assign dedicated case officers to firms in the regulatory sandbox—helping them navigate rules faster and with better access to funding.
Concierge services for international entrants: A new ‘concierge service’ for international financial services firms will support market entry and streamline regulatory onboarding.
“Minded to approve” notices: These early regulatory indicators will help start-ups secure investment by providing confidence during fundraising rounds, even before full approval.
For payment institutions, these updates significantly lower the regulatory entry barriers for new business models, particularly in cross-border payments, crypto, and embedded finance.
Key FCA Commitments for 2025
The FCA has pledged a range of reforms to improve predictability, efficiency, and support for innovative financial firms:
Dedicated case officers will be assigned to all firms in the FCA’s regulatory sandbox to speed up guidance and resolution.
50% more dedicated supervisors will be allocated to early-stage and high-growth firms to support their navigation of the regulatory environment.
Pre-application support will be extended to wholesale payment and crypto firms, enabling earlier engagement and smoother application journeys.
"Minded to approve" notices will be issued more frequently to help start-ups secure investment while regulatory approvals are still being processed.
Mortgage and financial advice rules will be simplified to increase access to home ownership and promote product innovation.
A review of contactless payment limits will explore changes to the current £100 cap, potentially improving customer convenience and checkout speed.
Capital requirements for specialised trading firms will be reviewed, potentially freeing up capital to support business expansion and investment.
What FinTechs and PSPs Need to Prepare For
While the Action Plan is clearly pro-business, FinTechs and payment firms should stay ahead of upcoming regulatory changes and responsibilities, including:
1. Consolidation into the FCA Framework
With the PSR merging into the FCA, expect updates to:
Supervision models
Reporting formats
Enforcement processes
Firms should begin reviewing internal policies to ensure they are aligned with FCA regulatory principles.
2. Potential legislative updates
The Treasury plans to review the FCA’s and PRA’s "have regards" to focus them on growth. This could alter how new regulations are drafted and prioritised, especially those impacting new tech and risk models.
3. FOS Reform and Scope Review
The Financial Ombudsman Service (FOS) will be reviewed to ensure it does not act as a quasi-regulator. This may change the appeals process, liability risk, and complaint handling protocols for regulated firms. Businesses should consider scenario planning for dispute resolution.
4. Faster Settlement Cycle (T+1 readiness)
Although not specific to this announcement, the broader regulatory direction aligns with the move to T+1 settlement, impacting liquidity, fund flows, and reconciliations for PSPs and e-money institutions.
5. Sandboxes and Regulatory Fast Lanes
A key message is the government’s intent to expand regulatory sandboxes and enable “fast lanes” for approvals, possibly including paid expedited processing. Firms should start identifying innovation use cases that could benefit from these mechanisms.
Strategic Opportunities: Plan for Engagement
The government's emphasis on proportionality, innovation, and efficiency aligns directly with the FinTech sector’s calls for reform. However, success will depend on active engagement with the consultation process.
We recommend firms:
Review the Action Plan timeline and align roadmap strategies to anticipated FCA and PRA updates.
Assess dependencies on PSR permissions and prepare for operational migration under FCA structures.
Map internal compliance and reporting frameworks to upcoming simplifications.
Engage with sandbox opportunities and innovation hubs, especially for crypto, AI-driven finance, and alternative lending.
Conclusion: A New Chapter for UK FinTech Growth
The Chancellor’s Plan for Change represents a bold shift toward a smarter, faster, and more globally competitive regulatory model. For the UK’s FinTech and payments sector, it offers long-awaited relief from complexity, and a more cooperative and innovation-friendly environment.
At AnyAccount Ltd., we help firms across the regulatory lifecycle—from FCA authorisations and variation of permissions, to internal compliance infrastructure and operational readiness for growth.
Contact us at info@anyaccount.org to explore how these reforms affect your business and how we can support your next stage of expansion.
