The Bank of England has officially announced the first selection of UK fintech companies that will participate in its newly established regulatory 'Scale-Up' unit. This initiative, designed to foster growth and innovation within the financial technology sector, marks a significant step in the UK's efforts to maintain its competitive edge in global finance.
Inaugural Cohort Features Leading Fintech Innovators
Among the firms accepted into this pioneering cohort are OakNorth and Allica Bank, both recognised as key players in the small business lending space. Allica Bank, notably identified by Deloitte as the fastest-growing fintech ever, highlights the unit's focus on high-potential enterprises. They are joined by Clearbank, a prominent banking-as-a-service provider, and Zopa, a well-known neobank unicorn that has reshaped digital banking.
Monument Bank, which targets the mass-affluent market and has been speculated to be considering a US listing, also forms part of this group. Rounding out the cohort is the Nottingham Building Society, an institution that has previously voiced criticism of government policies, such as the recent cash Isa reforms, which it labelled "deeply disappointing" following Budget cuts to allowances.
A Collaborative Regulatory Framework
The Scale-Up unit is positioned as a joint venture between the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), with the Treasury championing it as a means to "supercharge" the expansion of innovative fintech firms. It was first introduced during Chancellor Rachel Reeves' Financial Services Growth and Competitiveness Summit, where she outlined measures to bolster support for the fintech industry.
Richard Davies, chief executive of Allica Bank, commented on the initiative, stating, "Done well, the Scale-Up Unit can support the government's objective to make the UK the location of choice for financial services firms to invest, innovate and grow." Similarly, Mark Fairless, boss of Clearbank, expressed optimism, noting that the unit will help accelerate critical initiatives benefiting clients and the wider financial services sector in the UK.
Addressing Regulatory Challenges in Fintech
Regulation has long been a persistent challenge for UK fintech innovators, with industry body Innovate Finance previously criticising the PRA for imposing "logic defying" rules. A report from the organisation accused the PRA of creating "excessive" requirements that result in an "uneven playing field for UK challenger banks, placing heavy burdens on them."
In response, Chancellor Reeves has actively engaged with top fintech firms over the past year, aiming to encourage listings and retain talent within the UK. Executives from companies like Clearbank, Atom, Revolut, and Zilch met with her last July to advocate for tax incentives, warning that without such support, the UK risks losing these firms to overseas competitors.
UK's Position in the Global Fintech Landscape
Recent data from Innovate Finance indicates that the UK has strengthened its position as Europe's leading fintech hub, attracting $3.6 billion (£2.7 billion) in investment last year. This figure surpasses the combined total of the next five European countries, though it only narrowly edges out India, which recorded $3.4 billion in investment.
A surge in funding during the second half of 2025 played a crucial role in securing the UK's second-place ranking globally for total fintech investment. However, the sector faces increasing pressure from rapidly growing international competitors, underscoring the importance of initiatives like the Scale-Up unit to sustain momentum and innovation.
As the Bank of England moves forward with this regulatory framework, the focus remains on balancing oversight with growth, ensuring that the UK remains a premier destination for fintech investment and development in the years to come.
