Innovate Finance Urges UK Action on Open Finance and AI to Secure FinTech Lead

Innovate Finance has issued a sharp warning to the UK government, urging a policy acceleration to secure the nation’s fintech leadership. The industry body’s new report demands faster Open Finance deployment by 2026 and a shift in fraud liability toward social media platforms, highlighting critical regulatory gaps that threaten the UK's competitive edge in agentic AI and digital assets.

What was announced

The report, titled FinTech as a Force for Good, outlines six strategic pillars designed to convert the UK's current fintech strength into long-term economic value. Central to these recommendations is the acceleration of the Open Finance timetable. Innovate Finance argues that the current 2027 target is too slow, risking the UK's position as AI transforms financial services. By moving the deadline to before the end of 2026, the industry body believes the UK can better leverage "agentic AI"—autonomous tools that manage financial tasks.

The report highlights that 16% of UK adults, approximately 9 million people, already use AI for personal finance. Furthermore, an estimated £300 billion remains in low-interest accounts; Innovate Finance suggests AI-powered "cash sweeping" and switching could optimise these funds if data sharing is extended to savings, pensions, mortgages, and SME finance. This expansion of Open Finance is framed as a prerequisite for making the UK a magnet for AI investment.

Addressing the surge in digital crime, the report calls for legislative changes to the Online Safety Act. It advocates for social media and telecommunications firms to be held accountable when criminals use their services to target consumers. Data cited shows that 66% of authorised payment frauds in 2025 originated on online platforms, while Lloyds Bank analysis found 68% of purchase fraud reports between March 2025 and March 2026 originated on Meta platforms.

Finally, the report proposes a national Sterling stablecoin strategy. With 99% of current stablecoins denominated in US dollars, the body urges the government to enable stablecoin payments for public services and incorporate the technology into accounting standards to ensure the next generation of digital money strengthens the pound's position.

"The UK has the companies, talent and expertise to lead this new era. But that lead is not guaranteed, and other global markets are vying for our title. We need to move now – bringing forward Open Finance, putting responsibility for fraud where it belongs and building the foundations for Sterling stablecoins – to ensure the UK stays at the forefront of financial services innovation and global competitiveness, for the benefit of consumers and small businesses across the country. We look forward to continuing to work with our industry members, government, regulators and policy-makers to fully realise this opportunity."

Janine Hirt, CEO of Innovate Finance.

The companies involved

Innovate Finance serves as the independent industry body for the UK’s fintech sector, representing a diverse membership that includes high-growth scale-ups and established financial institutions. The organisation is led by CEO Janine Hirt and Chief Strategy Officer Adam Jackson. Its membership reflects the breadth of the British ecosystem, featuring prominent names such as ClearBank, a cloud-native clearing bank, and Allica Bank, which focuses on the SME market.

The report also draws on data from major market incumbents and tech giants. Lloyds Bank, one of the UK's major clearing banks, provided critical analysis regarding the origin of purchase fraud. Meta, the parent company of Facebook and Instagram, is identified as a primary source of the fraudulent activity currently impacting challenger banks and fintechs. Other notable entities within the Innovate Finance network include Thought Machine, a core banking technology provider, and specialist lenders like iwoca and Funding Circle, alongside digital-first brands like gohenry and ComplyAdvantage. These companies represent the infrastructure and consumer-facing services that Innovate Finance argues are currently under pressure from slow regulatory progress and rising fraud costs.

What FF News has reported before

FF News has closely tracked the intersection of UK lending and digital asset security. Recently, we covered how DNA Payments Partners with iwoca to Offer UK SMEs up to £1M Embedded Funding, illustrating the ongoing demand for integrated financial tools for small businesses. In the digital currency space, we reported that Cyberscope and STABO Partner to Secure Enterprise Stablecoin Payments and Treasury, a move that aligns with Innovate Finance’s call for a more robust UK stablecoin ecosystem. Additionally, the broader investment landscape remains active, as seen when Molten Ventures Secures £175M First Close for New European Growth Fund, highlighting the capital available for the very scale-ups Innovate Finance is seeking to protect through policy reform.

What this means

This announcement signals a pivot from fintechs being "disruptors" to being "protectors" of the UK’s economic stability. By demanding that Big Tech and telecoms share the cost of fraud, Innovate Finance is directly challenging the current reimbursement model that disproportionately burdens smaller banks and fintechs. This creates a clear friction point between the financial sector and Silicon Valley platforms. Furthermore, the push for a 2026 Open Finance deadline places the UK government under immense pressure to deliver legislative frameworks faster than traditional bureaucratic cycles allow. If the government fails to act on the Sterling stablecoin recommendations, the UK risks permanent dependency on dollar-denominated digital infrastructure, potentially eroding the pound's global relevance.