Driving Regulatory Innovation in Fintech for Faster Growth

Regulatory innovation in fintech plays a crucial role in the growth of financial services, particularly for neobanks like Revolut. In this video, experts discuss how regulatory support has been vital to the success of fintech companies in the UK. They highlight the importance of regulation in creating a stable environment for fintech growth, which has helped platforms like Revolut expand their offerings. The success of UK fintechs demonstrates that regulation, when done right, can foster sustained growth and innovation in the sector. With the right frameworks in place, fintechs can scale quickly and safely, attracting both investment and customer trust.

One of the key drivers of regulatory innovation in fintech has been the establishment of supportive regulatory environments that allow fintech companies to flourish. Open banking regulations, for example, were groundbreaking in 2019, allowing for better competition among UK banks and enabling fintech companies to offer innovative solutions. However, there has been frustration with the slower pace of progress in recent years. The implementation of open banking has stalled due to bureaucratic hurdles, and this has impacted the speed at which new innovations can be rolled out.

In addition to open banking, the UK’s regulatory focus on fraud prevention has been critical, but more cross-sector collaboration is needed to tackle fraud effectively. Other countries, such as Singapore and Australia, have developed successful cross-sector data sharing regimes that bring together payments firms, regulators, law enforcement, and tech companies to prevent fraud. The UK has been slower to adopt this approach, which highlights a gap in the regulatory ecosystem that needs to be addressed.

The payments architecture in the UK is another area in need of improvement. The delayed rollout of the New Payments Architecture (NPA) has put the UK at a disadvantage compared to countries like Brazil and India, which have implemented advanced, 21st-century payment ecosystems. Speeding up the NPA’s development would help the UK regain its position as a leader in payments technology and support the fintech sector’s continued growth.

Finally, there’s the need for a clearer and faster roadmap for regulating crypto assets. The UK’s Financial Conduct Authority (FCA) has outlined plans for the regulation of crypto assets, but some timelines extend into 2026 and beyond, causing uncertainty for companies like Revolut. A more urgent approach to implementing these regulations would help provide clarity and accelerate the development of the crypto market in the UK, without compromising customer protections.