Chetwood Bank Joins FCA and PRA Scale-Up Unit to Accelerate Digital Banking Growth

Chetwood Bank has been selected for the second cohort of the Scale-up Unit, a joint initiative by the Prudential Regulation Authority and the Financial Conduct Authority. This selection provides the digital challenger with direct regulatory support, a crucial advantage for fintechs navigating the transition from early-stage innovation to large-scale, sustainable banking operations.

What was announced

Chetwood Bank will join the Scale-up Unit to receive tailored guidance on regulatory processes, product innovation, and the impact of new policy proposals. The unit, which was originally announced by the Chancellor of the Exchequer in October 2025 as a pillar of the Government’s Financial Services Growth and Competitiveness Strategy, is designed to assist fast-growing firms as they enter new markets and scale their customer bases.

The bank enters the program following a period of significant balance sheet expansion. Over the last 18 months, Chetwood Bank reported a £1.7 billion increase in savings balances, representing 43% growth. This influx of retail savings has funded a broader expansion into mortgage and wholesale lending. During the same period, the bank’s treasury portfolio grew by 88%, or £1.6 billion. This includes a £1.1 billion rise in structured finance investments across Residential Mortgage-Backed Securities (RMBS), Asset-Backed Securities (ABS), and Collateralised Loan Obligations (CLOs).

The Scale-up Unit aims to provide a smoother regulatory experience for firms during critical growth phases. While participation does not imply an endorsement of Chetwood’s specific products by the FCA or PRA, it allows the bank to engage more closely with regulators to identify opportunities for sustainable growth and sector-wide competitiveness. The initiative is intended to help innovative firms grow sustainably at pace while navigating an increasingly complex regulatory environment.

"As a rapidly growing bank, the Scale-up Unit offers us a valuable opportunity to engage more closely with both the FCA and PRA, helping us navigate an increasingly complex regulatory environment while supporting our growth ambitions."

Paul Noble, Chief Executive Officer at Chetwood Bank

The companies involved

Chetwood Bank is a UK-based digital challenger bank that focuses on making specialist banking simpler and more accessible through technology and strategic partnerships. The firm operates across several verticals, providing mortgage and wholesale lending solutions alongside retail savings products. Its client base includes individual savers, professional landlords, intermediaries, and institutional partners.

The bank has positioned itself as a tech-led alternative to traditional high-street lenders, leveraging its digital infrastructure to scale its lending and investment activities. By combining structured finance expertise with a growing retail deposit base, Chetwood has established a significant presence in the UK's specialist lending market. The firm’s recent growth in structured finance investments, particularly in RMBS and CLOs, highlights its role as an active participant in the broader financial ecosystem beyond simple consumer deposits. As a digital-first institution, its operational model is built around the ability to deploy capital efficiently while maintaining a strengthened liquidity position, a strategy that has seen its treasury portfolio nearly double in less than two years.

What FF News has reported before

FF News has closely followed Chetwood Bank’s expansion, featuring the firm in 29 previous reports. In late 2026, the bank made significant moves to bolster its leadership and physical footprint, including the news that Chetwood Bank Appoints Investment Banking Veteran Melanie Czarra as Non-Executive Director. This followed the bank's decision to Scale London Presence with New City Headquarters in Tower 42.

The bank’s subsidiary activities have also been a focus, notably when CHL Mortgages Expands Specialist Lending with New Bridging Proposition Launch. Additionally, the bank has contributed to industry discourse through its own data, such as when Chetwood Bank Research Reveals 39% of UK Adults Lack £300 Emergency Buffer.

What this means

This announcement signals a maturing relationship between UK regulators and the challenger bank sector. For years, fintechs have suggested that rigid regulatory frameworks stifle growth once a firm moves past the startup phase. By bringing Chetwood into the Scale-up Unit, the PRA and FCA are acknowledging that high-growth digital banks require a different level of engagement than either tiny incumbents or established Tier 1 giants. This moves the needle for the industry by providing a blueprint for how middle-tier challengers can scale without the friction of regulatory misalignment. It puts pressure on other mid-sized lenders to seek similar bespoke engagement to remain competitive in product innovation.