Your guide to this week in regulation

This week, we lead with two major initiatives that underline the importance of ensuring consumer protection and trust in the market. Despite the prevalence of Buy Now Pay Later (BNPL) and its importance as a source of credit for many, the absence of customer protections has become a material gap. And so our leading item this week brings welcome news with final rules laying the path towards an effective date for new rules from 15 July 2026. 

Elsewhere, regulators join forces to issue a warning to firms representing motor finance commission claims ahead of the proposed redress scheme. 

We conclude this week with latest thinking on the future of banking data (striving to reduce the burden without the trade-off), initiatives for growth and innovation, and a recent keynote speech from Andrew Bailey. 

BNPL borrowers gain new safeguards 

Regulators warn on motor finance claims 

The FCA and Solicitors Regulation Authority (SRA) have issued a joint warning to claims management companies and law firms handling motor finance commission claims. They want firms to stop consumers being signed up by more than one representative and to prevent unfair termination fees. They expect firms to run proper checks before taking on clients and to ensure any exit fee is reasonable and reflects actual work. The FCA has already pushed two firms to change their fee policies, which has protected about 70,000 consumers. The SRA has reminded firms of its rules and has several open investigations into those working in high volume consumer claims. 

The regulators are also concerned about poor onboarding, weak due diligence and misleading adverts. The FCA’s monitoring has led to more than 800 adverts being changed or removed since January 2024, and it has opened an investigation into one firm’s sales tactics. Ahead of a proposed redress scheme, the FCA will run an advertising campaign warning consumers about scams. 

Affected firms may want to check whether their own onboarding, fee structures, financial promotions and due diligence controls meet FCA and SRA expectations, as the regulators intend to keep monitoring and will take action where needed. 

Read more on the FCA and SRA warning 

Read more on the FCA and SRA joint message to professional representatives on motor finance commission claims 

PRA maps future of banking data 

The Prudential Regulation Authority (PRA) has opened a major discussion on how it collects banking data and plans to reshape the framework to cut industry costs while keeping oversight strong. It wants to make reporting simpler, more proportionate and easier to manage, without weakening its ability to assess risks, supervise firms or support financial stability. This work sits within its Future Banking Data programme and follows its first wave of template deletions in December 2025. 

The paper explains how supervisory, policy and financial stability work rely on timely, high-quality data, yet firms face rising reporting burdens. The PRA highlights duplication in legacy templates, inconsistent instructions and gaps in areas such as nonbank risks. It proposes four principles for reform: align data to objectives, collect information once and use it well, make reporting easier and keep the framework fit for future needs. It also acknowledges trade offs between timeliness, comparability, granularity and cost. 

The PRA wants responses by 5 May 2026. Firms should review the discussion paper and consider where simplification, clearer instructions or changes in frequency would reduce effort without weakening oversight. 

Read more on DP1/26 – Future banking data 

Global outlook carries clear risks 

Andrew Bailey used his speech at the AlUla Conference to warn that, while the global economy has shown resilience, the risks remain firmly on the downside. He noted that inflation has stayed contained and financial conditions remain accommodative, helped by strong technology sector valuations, but he cautioned that markets may be underestimating the threats ahead. The IMF’s latest outlook points to four core risks: rising geopolitical tensions, further disruption to already fragile trade policy, fiscal strains driven by high public debt, and the possibility that expected productivity gains from AI may not materialise.sector valuations, but he cautioned that markets may be underestimating the threats ahead. The IMF’s latest outlook points to four core risks: rising geopolitical tensions, further disruption to already fragile trade policy, fiscal strains driven by high public debt, and the possibility that expected productivity gains from AI may not materialise. 

Bailey also highlighted long-term pressures that continue to weigh on advanced economies. These include slowing productivity, ageing populations, retreating trade openness and major shifts across financial systems. He positioned AI and robotics as the likely next drivers of productivity but warned that benefits will take time to emerge and labour market impacts remain uncertain.

He closed by stressing that global growth and financial stability depend on innovation, openness and effective international cooperation. Firms should track emerging AI related risks and remain alert to policy signals as governments and institutions continue to adjust their frameworks. 

Read more about the world today remarks by Andrew Bailey 

Regulators launch first scale-up cohort 

The PRA and FCA have confirmed the first six banks and building societies to join their new joint Scale-up Unit. The Unit aims to help fast-growing firms build stronger links with supervisors and navigate regulations as they expand.  

The regulators will meet with the firms over the coming months to offer tailored support as they develop products, reach new customers and enter fresh markets. The programme is designed to help firms grow at pace while improving supervisors’ understanding of the barriers scaling firms face. This insight may inform changes to regulatory processes across the sector. 

For senior leaders, the key takeaways are the clear focus on sustainable growth, the intention to sharpen regulatory pathways for expanding firms, and the link to wider reforms such as Basel 3.1, Solvency UK and Strong and Simple. The regulators also highlight alignment with their existing support routes, including the Sandbox and pre-application support service (PASS). 

The regulators will open expressions of interest for a second cohort later this year. Firms that meet the criteria, including smaller fast-growing insurers, can request support now. 

Read more on the regulator’s announcement of the first firms to join Scale-up Unit