The UK financial services industry has welcomed a set of reforms announced by the chancellor designed to "rewire the financial system" and boost investment in Britain.

During her Mansion House speech on Tuesday evening, which took place in Leeds, Rachel Reeves said that the reforms would remove barriers to attracting investment in the sector by reintroducing informed risk-taking into the system following the 2008 financial crash, cutting unnecessary red tape, driving more finance into public markets, and actively helping international companies to set up in the UK.

As part of the Leeds Reforms, the chancellor outlined plans for a new concierge service within the Office for Investment which will harness UK networks globally to "actively court" international financial services companies, creating a "one-stop-shop" to promote the UK.

The Bank of England will also allow more lending at over 4.5 times a buyer's income, helping 36,000 more people buy a home in the first year. Additionally, Nationwide Building Society has pledged to support an additional 10,000 first-time buyers by lowering income thresholds for its 'Helping Hand' mortgage from Wednesday.

Nationwide said that the package of pro-growth reforms outlined in the speech has "real substance and clear, positive intent", adding that it would be well received across the UK financial services sector.

The plans also include changes to the Senior Managers and Certification Regime, originally intended to address failures in individual accountability and culture that contributed to the 2008 financial crisis. The government says that the Regime was implemented in a way that creates "unnecessary costs for business", explaining that the reforms would help to "radically streamline" it, cutting the burden on firms in half.

The Financial Conduct Authority (FCA) will also be assessing how the Consumer Duty applies to wholesale firms after the regulation, first launched in 2023, has impacted the way businesses interact with other businesses, such as investment banks and asset managers.

“The Leeds Reforms set out a clear and confident vision for how the UK’s financial system can better support growth, innovation, and investment across the economy," said Richard Davies, chief executive of Allica Bank. “As a bank dedicated to established businesses, the reforms also help unlock much-needed capital investment for the vital SME sector – the UK’s real economy."

He added that ensuring a balanced, competitive environment for these businesses and the UK’s financial system as a whole is "vital to securing growth", adding that the digital bank is pleased with the steps taken by the chancellor.

“The Chancellor's speech was a recognition that financial services must be the engine of the government's growth mission but also an invitation to the City of London, the regions and the wider industry to place digital innovation at the heart of British financial services," said Nicole Sandler, head of corporate and regulatory affairs at the Centre for Finance, Innovation and Technology (CFIT). "The roll-back of crisis-era banking regulations will grab the headlines, but what matters more is how we prepare for the future."

She said that encouragingly, the speech looked ahead to the next wave of innovation, from targeted efforts around blockchain, including tokenised securities and stablecoins to broader steps to digitalise the financial system.

"What this speech got right is that FinTech can’t be treated as a bolt-on. It must become the infrastructure that powers the future of financial services,” continued Sandler.

Robin Anderson, head of product management at Tribe Payments, said that the Mansion House update signals a "real shift from lip service to action" on modernising the UK's regulatory environment.

"For companies like Tribe, who work with banks and FinTechs to bring new payment and banking products to market fast, speed and clarity are everything," he said. "Faster decisions and sharper frameworks can make all the difference in time-to-market – and ultimately, in getting better financial services into the hands of the people and businesses who need them."

ClearBank's chief executive Mark Fairless also welcomed the reforms, marking the speech as a "pivotal moment" for UK FinTech.

"By committing to faster authorisations, a more strategic regulatory approach, and the creation of a dedicated Scale-Up Unit, amongst other measures, the government are directly addressing the barriers that have held back high-growth firms," he added. "This is a clear signal that the UK is serious about remaining a global leader in financial innovation.

"At ClearBank, we welcome these changes as a vital step toward unlocking the full potential of the FinTech sector.”

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