UK Pushes for Smarter Regtech to Unlock the Next Wave of Financial Innovation

As Britain leads the world in financial services exports, industry leaders urge regulators to modernize rules for the AI and RegTech era.

The UK is calling for a fresh approach to financial regulation as it looks to protect its global leadership while embracing new technologies such as AI and RegTech. Industry leaders say existing rules are struggling to keep pace with innovation and need urgent updates to support growth, competition and resilience.

New figures from TheCityUK show Britain remains the world’s largest net exporter of financial services, posting a trade surplus of US$127 billion in 2024, well ahead of the United States and other major financial hubs. Despite ongoing economic pressures, UK-based financial and professional services continue to perform strongly on the global stage.

However, experts warn that outdated regulation could slow future progress. Speaking on the findings, TheCityUK’s chief economist highlighted growing uncertainty in the global economy, driven by geopolitical tensions and market volatility. Even so, she noted that the sector’s resilience underlines its importance to the UK economy.

The issue took centre stage at a World Economic Forum-linked workshop, where regulators and industry leaders discussed how rules must evolve alongside technology. TheCityUK is now urging policymakers to adopt smarter, more flexible regulation that encourages innovation while managing new risks.

AI, predictive analytics and automation are opening powerful new opportunities, from detecting fraud earlier to strengthening cyber defenses. At the same time, they raise concerns around accountability, data governance and cross-border compliance, areas where RegTech tools can play a critical role.

Industry voices are calling for greater global coordination to reduce regulatory complexity and prevent new barriers to competition. They argue that harmonized, technology-friendly rules will help financial institutions deploy RegTech solutions more effectively, strengthen trust, and support long-term, sustainable growth in an increasingly digital financial system.