The FCA’s representatives wrote to the Prime Minister and Chancellor to inform them regarding the authority’s plans for 2025, with it aiming to introduce a new approach to ensure regulators and regulations support the development of the UK’s economic landscape. The letter comes as a response to a government call for regulators to assist growth, sent by the Prime Minister on 24 December 2024.
To further assist in the development of the UK’s financial sector, the FCA established an AI Lab to support financial firms in addressing difficulties related to the implementation of AI solutions. This was announced in October 2024, with the regulator’s Chief Data, Information, and Intelligence Officer launching the initiative and emphasising its alignment with government efforts to facilitate the responsible development of AI technologies. They underlined that the AI Lab was projected to offer valuable insights, discussions, and case studies regarding AI, assisting a collaborative environment for open dialogue between industry representatives and regulators.
According to the letter sent to the Prime Minister and Chancellor, the FCA intends to collaborate with regulators to advance its development commitment and, to achieve the reforms necessary, it requires acceptance that it is set to take increased risks and prioritise resources. Additionally, the FCA underscored that the UK needs a financial services digital infrastructure plan to further assist the region’s AI strategy. The regulator is prepared to take a leading role and embrace a digital-first approach. Also, besides delivering the National Payments Vision, in 2025, the FCA plans to go further and collaborate with the PSR to launch a new Open Banking payment method, VRPs, thus working on scaling competition and choice in the market.
Furthermore, the FCA is set to leverage its capabilities anticipated under the Data (Use and Access) Bill to advance Open Finance, possibly working on prioritising small and medium-sized enterprise (SME) lending. As part of its letter, the authority also highlighted areas where additional government action could improve collective efforts, including digital identity authentication and verification.
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