King's Speech 2026: Enhancing Financial Services Bill

Enhancing Financial Services Bill

● The financial services sector plays a vital role in the UK’s economy – it is one
of the most successful export sectors, a key enabler of growth in other
sectors, and a provider of payments, credit, insurance and investment
services to households and businesses all across the UK, including through
credit unions supporting communities nationwide.

● The Enhancing Financial Services Bill will deliver key parts of the Leeds
Reforms set out by the Chancellor in 2025. It will modernise how the sector is
regulated, enable it to grow and to lend more to businesses, and make
consumer protections fit for the digital age – all while maintaining high
standards of regulation and oversight, supporting the UK’s position as a
leading global financial centre.

What does the Bill do?

● The financial services sector is one of the UK’s greatest economic
success stories – playing a vital role in the economy, responsible for around
20 per cent of UK exports and underpinning the provision of payments, credit,
insurance and investment services to households and businesses. The UK is
the world’s largest net exporter of financial services and a leading global
financial centre, serving people and businesses across the world. It supports
jobs across the country in places like Leeds, Manchester, Edinburgh and
London.

● The UK financial services sector has continually been at the forefront of
innovation. However global competition has intensified and the UK needs to
keep up the pace. This has meant that in recent years, the sector has
experienced slower growth and productivity gains, and higher costs. We want
Britain to be more competitive globally, and to harness the UK’s global
leadership in financial services, so it is better able to support UK businesses
and consumers.

● The Bill will:

○ Modernise consumer protections and redress arrangements to
reflect today’s markets and maintain confidence. It will ensure
consumers are appropriately protected when something goes wrong,
making sure protections are fit for the digital age. Reforms to the
Financial Ombudsman Service will increase consistency and clarity of

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 decision-making, helping people resolve disputes more quickly and
with greater certainty.

○ Consolidate the regulatory framework to enable stronger
coordination and clearer responsibilities, reduce fragmentation of
the regulators and support innovation. By streamlining the
regulatory architecture and consolidating the Payment Systems
Regulator within the Financial Conduct Authority (FCA), firms will deal
with fewer overlapping regulators, providing clearer accountability and
faster decision-making.

○ Ensure that the administrative burden on firms is proportionate
without compromising on core consumer, prudential and market
protections. This includes reducing the overall burden of the Senior
Managers and Certification Regime - the framework that holds senior
leaders in financial firms personally accountable - by 50 per cent with a
focus on accountability of the most senior figures in financial services;
freeing up firms to focus on serving customers and invest in growth,
rather than dealing with overly burdensome compliance processes.

○ Enable credit unions to expand by improving the rules on who can
become a member. This will allow credit unions to serve more people
and communities, widening access to affordable finance and
supporting the Government’s aim to double the size of the mutual and
co-operative sector.

○ Support lending and investment including by updating the statutory
framework underpinning the ring-fencing regime, which requires major
banks to separate their UK retail banking services from investment
banking activities. The reforms will unlock more finance for UK
businesses. Improved competition in Small and Medium-Sized
enterprises’ (SME) lending will help small businesses access finance.

Territorial extent and application

● The majority of measures will extend and apply to the whole of the UK.

Key facts

● The financial services sector accounts for around 8 per cent of UK output
and employs more than 1.1 million people across the country. It is one of the
UK’s most globally competitive sectors, with London ranked second only to New
York in the 2025 Global Financial Centres Index.

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● The sector also makes a very significant tax contribution. According to
TheCityUK figures, in 2023 the sector contributed £79.3 billion, or around 9 per
cent of total UK tax receipts.

● The UK is the largest global net exporter of financial services totalling
£102.2 billion in 2025, representing half of the UK’s services export surplus. ONS
figures show that excluding the US, UK financial services exports in 2025 were
greater than the rest of the G7 combined.

● Despite its strengths, the sector has not grown in real terms since 2010, in
contrast to several international financial centres that have recovered more
strongly since the Global Financial Crisis. Slower growth can harm
productivity, innovation and jobs, and risks losing jobs and investment overseas.

● The financial services regulatory framework has grown significantly over
time. Responses to the Government’s ‘Financial Services Growth and
Competitiveness Strategy: Call for Evidence’ indicated that the complexity of the
UK regulatory environment is detracting from the UK’s overall attractiveness, with
many respondents indicating that it was more complex and burdensome to be
regulated as a financial services firm in the UK than in other countries.

● Credit unions are financial co-operatives currently serving over 1.5 million
people across Great Britain, according to Bank of England data. These reforms
will make it easier for the 220 credit unions in Great Britain to attract more
members, allowing millions more people to potentially benefit from the expansion
of affordable, community-based financial services. This supports the
Government's ambition to double the size of the mutual sector and, as credit
unions are deeply embedded in their communities, promote growth across all
regions of Great Britain.

● The Chief Executive Officer of Santander UK, Mike Reigner, said “We welcome
the announcement of the Leeds Reforms… which set out a positive vision for UK
financial services. The changes outlined within the package are important steps
to modernising the UK’s regulatory architecture, and will enable banks like ours to
support our customers better and drive growth within the wider economy.”

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