Unlocking Growth in Financial Services: What Rachel Reeves’ Mansion House Speech Means for Tech
The Chancellor’s Mansion House Speech and the Financial Services Growth & Competitiveness Strategy mark a pivotal moment for the UK technology sector. The Government has reaffirmed its ambition for the UK to be the world’s most technologically advanced global financial centre.
The strategy closely aligns with many of techUK’s long-standing recommendations and creates meaningful momentum for the tech sector to become a fully embedded, strategic partner within the UK’s financial services ecosystem.
Blockchain – The Next Frontier
Blockchain technologies featured prominently throughout Reeves’ speech and the broader Financial Services Strategy, reflecting the Government’s recognition of their transformative potential across key areas of the financial system. This was especially evident in the commitments to continue exploring the digital pound, introduce a new regulatory framework for stablecoins, enable the use of Distributed Ledger Technology (DLT) in new parts of financial services, and progress work on tokenised settlement instruments.
We were pleased to see such strong focus on blockchain, particularly given the contributions of techUK’s Digital Assets Group across many of these areas. The emphasis within the strategy highlights a significant opportunity for blockchain—and the wider UK tech sector—to drive innovation and growth in financial services.
To build on this momentum, techUK will soon launch its UK Vision 2030 project, with a report due this autumn. This will outline a technology sector vision for a future in which blockchain is successfully embedded across the UK economy. We encourage our members to get involved and help shape a bold, actionable agenda for the next five years.
Artificial Intelligence (AI) – Driving The Future of Financial Services
The Financial Services Strategy outlined several of the key initiatives already underway to help the UK be the world’s best destination for AI investment. Broadly speaking it intends to achieve this through better AI infrastructure, better access to data, pro-innovation regulation and the development and attraction of elite AI talent. On the application of AI in financial services, government intends to work with industry to identify the best opportunities to increase AI R&D funding into financial services.
techUK supports this goal and stands ready to support. We will be partnering with TheCityUK on the theme of AI in financial services and convening leading tech firms, financial services companies and regulators in the Autumn to drive forward progress in this important area. In particular we will explore the role of third party AI supplier within the financial sector, this currently represents 33% of AI use within FS but is expected to grow. We also continue to explore the use of AI in detail through our AI Leaders series, with upcoming webinar planned focusing on harnessing the power of open source AI and frugal AI. We would encourage our members to engage with this event, and following activity as this area of techUK’s membership offering develops.
Pro-Innovation Regulation
There were several significant announcements aimed at shaping a more pro-innovation regulatory environment. techUK was pleased to see many of our recommendations from the recent Evolving Digital Regulation for Growth and Innovation report reflected in the Government’s plans.
In particular, we welcomed the emphasis on a more strategic approach to regulation and supervision, the introduction of shorter deadlines for processing regulatory applications to ease doing business in the UK, and measures to accelerate and streamline the authorisation of new firms.
techUK continues to work closely with regulators on delivering the Government’s target to reduce regulatory barriers by 25%. We maintain open engagement with the DRCF regulators to improve the understanding and measurement of regulatory impact and are actively supporting the Regulatory Innovation Office in breaking down barriers to innovation.
Scaling British Business
As with the wider Industrial Strategy, the plan featured a significant and welcome focus on measures required to ensure the UK remains a leading jurisdiction for firms to start up, scale up and list.
The strategy outlined efforts by government to ramp up support for start-ups and scale-ups with a £4 billion capital injection via the British Business Bank to boost innovation and growth in key industrial sectors including financial services. Government is also working with the City of London Corporation and the British Business Bank to improve access to finance and commercial networks for high growth fintech firms. Regulators, including the FCA and PRA, are launching a new Scale-Up Unit to help innovative regulated firms navigate requirements as they grow.
techUK has long championed these ‘ultra-growth’ companies, recognising their outsized economic impact, their welcome dynamism, and their ability to rapidly transform the sectors and regions in which they operate. Earlier this year, we stated in our Scale up Action Plan if the Industrial Strategy is to deliver on its vision it will be a compelling plan for supporting scale-ups, powered by technology at its core. We are pleased to see that both the strategy and sector plans have taken this challenge seriously and are taking steps to meet it. techUK's work in this area is primarily delivered through the Scale Up Council.
Digital ID – The Missing Link
We were delighted to see the mention of Digital Identity within the strategy, but it is disappointing to note the lack of significant progress in integrating Digital ID into KYC processes, particularly in the context of AML checks.
This is despite the Data Use and Access Act now establishing the legal groundwork for Digital IDs under the Trust Framework. In June 2024, techUK responded to the "Improving the effectiveness of the Money Laundering Regulations" consultation, in which we outlined the benefits of integrating digital ID processes and called for greater understanding and awareness of digital ID within HMT.
techUK would like to see the government become stronger advocates for the implementation and acceptance of Digital ID solutions. This includes in financial services for vital AML checks within required MLRs. techUK also remains eager to work with regulators like the FCA, to help tangibly realise the benefits of digital ID.
Conclusion – a strategic opportunity for UK tech
Taken together, the announcements made in the Chancellor’s Mansion House Speech and the accompanying strategy signal a step-change in the Government’s approach to financial services — one that places technology and innovation at its heart. From blockchain and AI to regulatory reform and scale-up support, there is now a clear recognition that the future of financial services will be shaped by digital capability.
This presents a major opportunity for techUK members to embed themselves as long-term strategic partners to the financial sector. techUK’s financial services work is led by our Financial Services Council, and through your membership of techUK, companies can engage directly with policymakers, regulators, and industry leaders to shape the future of UK financial services.
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Meet the team
James Challinor
Head of Financial Services, techUK
James leads our financial services programme of activity. He works closely with member firms from across the sector to ensure innovation and technology are fully harnessed and embraced by both industry and regulators.
Prior to joining us James worked at other business organisations including TheCityUK and the Confederation of British Industry (CBI) in roles focused on supporting the financial & related professional services eco-system, with a particular focus on financial technology and market infrastructure.
He holds degrees from King's College London and Oxford Brookes University, and outside of work enjoys socialising, exercising, and travelling to new locations.
- Email:
- [email protected]
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- https://www.linkedin.com/in/james-challinor-105212177/
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