This week, we lead with the far-reaching debate around AI and its likely impact on the industry, its workforce and their skills. Given the current pace of change, even the most ardent commentators may struggle to confidently predict trends for the next 5-10 years, which is the focus for a recent call for evidence from the Financial Services Skills Commission (FSSC).
Meanwhile, regulators at the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are collaborating on multiple fronts – in the form of a newly announced ‘scale-up unit’ that aims to support and foster growth, and latest developments around the consolidation of the Payment Systems Regulator (PSR) into the FCA.
Elsewhere this week, we highlight latest developments and trends across complaints data and the major industry shift to ‘T+1’ settlement.
Financial Services Skills Commission call for evidence on AI impact
The FSSC has launched a major piece of research into artificial intelligence and disruptive technologies to understand how they will shape the future of work in financial services. Backed by the Treasury, the study will explore how roles, skills, and customer needs might evolve over the next decade. To ensure a broad view, the commission is inviting input from firms, trade bodies, educators, and others across the sector.
The call for evidence is open until 26 November 2025, and roundtable events are planned throughout that month in London, Cardiff, and Edinburgh to hear directly from professionals. These sessions will look at regional opportunities, tech trends, and how to support workers through change. Senior professionals in AI and/or skills strategy are encouraged to register their interest. This research marks a significant step in preparing the sector for a tech-driven future.
Read more about the research into AI and disruptive technology
Treasury announces launch of new joint FCA and PRA Scale-Up Unit
The Chancellor, Rachel Reeves, has announced the launch of the FCA and PRA Scale-Up Unit. The unit will provide growing financial sector regulated firms across the country with tailored support and guidance to help them test ideas, grow and succeed in the UK. It will also help firms by connecting them with a dedicated point of contact to support with challenges they face as they grow.
The unit will help regulated firms looking to scale up with support regarding regulatory processes, product innovations, impact of new policy proposals and sector engagement. It will initially support dual regulated firms and will play a key role in supporting growth, a central part of the FCA’s five-year strategy.
Read more about the FCA and PRA Scale-Up Unit
FCA and PSR response to consolidation proposals
The FCA and PSR recently published their joint response to the Treasury’s consultation on consolidating financial services regulators, agreeing with the proposal for the FCA to take on all of the PSR’s responsibilities. Their response highlights the steps already taken to streamline operations and enhance efficiency, having combined certain leadership roles, formed joint project teams, and integrated support functions.
The regulators emphasise the continued importance of economic regulation in addressing challenges in payment systems, such as market dominance and limited innovation. The response supports the transferring of the PSR’s powers to the FCA to maintain robust oversight of payment system operators and infrastructure providers, ensuring continued focus on competition, innovation, and user interests. The response also endorses the consolidation of the PSR’s functions within the FCA’s existing framework under the Financial Services and Markets Act 2000 (FSMA 2000), aiming for a streamlined framework that avoids duplication and reflects the unique characteristics of payment systems.
The FCA and PSR welcome the Government’s proposals for improvements in any other areas of the PSR’s current powers, and commit to working with Treasury to ensure a smooth and effective transition.
Read the FCA and PSR's response to the government consultation on the future of payment systems regulation
FCA complaints data for first half of 2025
The FCA has released its latest batch of complaints data, this time covering complaints received by firms in the first half of 2025.
Since H1 2021 complaints numbers have remained relatively constant, ranging from 1.7 million to 2 million. This latest period is no different, with 1.85 million complaints representing a slight increase on the amount received in the second half of 2024. Banking complaints made up almost half of these with just shy of 900,000 complaints. Complaints about current accounts increased by 10.2% in the period, but intriguingly credit card complaints saw a slight decrease of 2.4%.
Despite motor finance making the headlines of late, complaints volumes have remained stable. 255,192 complaints within the period represented just a 0.2% increase on H2 2024, suggesting that consumers may be holding off in advance of the regulator’s proposed redress scheme.
The percentage of complaints upheld by the regulator remained stable at 57%. However, the total amount of redress paid out by firms came to £283 million – a 20% increase on the amount paid out in H2 2024.
Read more about the aggregate complaints data for H1 2025
FCA Dear Compliance Officer letter on T+1 securities settlement expectations
The FCA has issued a Dear Compliance Officer letter to firms within its Asset Management and Alternative Firms portfolio. The letter sets out the FCA’s expectations ahead of the market transition from a T+2 to a T+1 securities settlement cycle on 11 October 2027.
The letter sets out the FCA’s expectations for all firms to familiarise themselves with the recommendations in the Accelerated Settlement Task Force (AST) report and put in place a project plan to move to T+1 by October 2027. This includes identifying the changes that need to be made by the firm and securing the necessary funding and budget to implement those changes.
The FCA will continue to engage with firms on their T+1 plans as part of its ongoing supervision and where necessary it may ask firms to describe their implementation plans before the deadline.
Read the Dear Compliance Officer letter: FCA expectations for UK move to T+1 securities settlement
