2024: full steam ahead on financial services regulatory change 

2024: full steam ahead on financial services regulatory change 

The nation is widely tipped to be called to the general election polling booths in autumn 2024. Yet, irrespective of the much-touted prospects for a new Labour government, what can firms expect from financial services regulation in the coming year? 

The Chancellor’s Edinburgh Reforms announced in late 2022 gave renewed momentum to a de-regulatory swing in the regulatory cycle. The Edinburgh agenda proposes looking again at the cornerstones of banking reform which followed close on the heels of the 2008 Financial Crisis, including ring-fencing of retail banks and the ‘SMCR’ individual accountability regime. 

In the face of a stagnant economy, the Treasury is pushing a dogged focus on international competitiveness and growth in UK financial services, not least in new secondary objectives for the FCA and PRA and plans to revisit inconvenient elements of EU-derived regulation, including proposed reforms to capital rules for insurers under Solvency 2.  

Yet this more ‘facilitative’ approach to financial services regulation has been tempered by a reluctance to leave emerging financial activities outside the UK regulatory perimeter. The regulators are gaining fresh powers, for example, to oversee BNPL lending and digital assets. It will be interesting to see how this inherent tension plays out. 

What is clear is that the pace and volume of regulatory change in 2024 will continue to come thick and fast and is unlikely to be derailed, at least for the moment, by electoral outcomes. Both the regulation of new activities and the rowing back of former EU rules under the Future Regulatory Framework will contribute to frequent and significant fluctuations in the ‘status quo’. 2024 will, as ever, present challenges for financial firms in keeping pace with regulatory developments. 

The latest Regulatory Initiatives Grid is packed full. The sector-specific summary for payments and cryptoasset firms alone runs to 7 pages (page 34 onwards) and covers areas as diverse as access to cash, improved safeguarding for payment and e-money institutions, new legislation on crypto-asset regulation, more firms adopting ‘confirmation of payee’ technologies and progress towards the APP fraud reimbursement scheme. The pace of regulatory change underlines concerns raised in the recent Garner Review on the Future of Payments that the burden of regulation may be stifling innovation, especially amongst small, start-up fintech firms. 

As your business looks forward to 2024, our financial services solicitors can support you in keeping up-to-date with all the latest regulatory requirements. Timely help and advice ensure your business can comply with its regulatory obligations and free up staff time and expertise to capitalise on emerging commercial opportunities. 

About our expert

John Pauley

John Pauley

Financial Services Partner
John is a specialist solicitor with extensive expertise in financial services regulation. He advises financial institutions, services providers, and merchants on regulated activities including payments, e-money, consumer credit, data protection, anti-money laundering, and gambling operations.

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