Bank of England launches Scale-Up Unit

The Bank of England has announced the launch of its new Scale-Up Unit to support UK fintech firms, with OakNorth, Allica Bank, Clearbank, Zopa, Monument Bank, and Nottingham Building Society among the first cohort to be overseen by the regulatory initiative. This initiative, a collaboration between the Financial Conduct Authority and the Prudential Regulation Authority (PRA), aims to enhance growth in the fintech sector and address regulatory challenges faced by fintech firms. 

PRA and FCA officials will meet directly with the firms, both as a group and individually, throughout the coming months. This will also help the PRA and FCA better understand scaling firms’ experience of the regulatory process, to improve regulatory processes for the entire sector to help firms expand and innovate.

Charlotte Gerken, Executive Director for UK Deposit Takers at the PRA, said “Welcoming the first cohort to our Scale-up Unit is an important milestone. It shows our commitment to helping firms grow in a sustainable way that benefits the financial services sector and wider economic growth.”

Jessica Rusu, Chief Data, Information and Intelligence Officer at the FCA said “We look forward to working with the first cohort as we deliver on our strategy to support growth and UK competitiveness. Our joint Scale-Up Unit enhances the support available to firms as they move from start-up to scale up, helping them to grow successfully and sustainably.”

The regulators will be open to expressions of interest from a second cohort of firms later this year, with further detail to follow.  The Scale-up Unit is also open to requests for support from smaller, fast-growing insurers on an ongoing basis, rather than through a cohort, in line with the criteria set out on the PRA website. 

The FCA currently supports new and high growth firms through its Early and High Growth Oversight function. They will further enhance their offer by opening expressions of interest for a new solo regulated Scale up cohort in the Spring, supporting firms from a wider range of sectors.

Richard Davies, CEO of Allica Bank, said “Allica are delighted to be included in the initial Scale-up Unit cohort, having led the call for a dedicated regulatory unit to support firms as they scale. The Unit should provide banks like Allica with more capital certainty and more regulatory support to boost lending to the established SMEs that power the UK’s real economy.

“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.” 

Rishi Khosla, CEO and Co-founder of OakNorth, said “We’re honoured to be part of the first cohort of the Scale-up Unit. OakNorth was founded to empower breakthrough businesses – profitable and scaling lower-mid-market companies – who are too often overlooked by traditional banks, and this tailored regulatory support will help us better deliver on that mission as we continue to scale. 

“Having already lent over $21bn to these businesses, supporting the creation of tens of thousands of jobs and homes, we’re delighted to work closely with regulators to build an even stronger platform for sustainable growth.”