Navigating the regulatory landscape presents significant challenges for startups. However, embracing compliance proactively can transform these challenges into strategic advantages, enhancing credibility and attracting investment. Written by Claire Conby, Finnovation UK, and Dr Louise Beaumont, Global Industry & Policy Engagement at Mastercard, this article was inspired by their conversation on the Innovation Stage during a panel about Regulation and Innovation at Pay360 on 25th March 2025.

The UK’s Financial Conduct Authority (FCA) is playing a pivotal role in fostering financial innovation while maintaining regulatory oversight. This article explores how initiatives like the Regulatory Sandbox, Digital Sandbox, and Innovation Pathways help startups and established firms test new financial products in a controlled environment. It examines the benefits and challenges of the FCA Sandbox, compares alternative routes to becoming a regulated UK financial business, and highlights how firms can navigate the evolving post-Brexit regulatory landscape to drive fintech growth.

Stablecoin regulation is a priority for the UK government and is addressed within the FCA cryptoasset roadmap that was published late 2024, with plans for discussion and consultation papers during 2025 with a view to  a defined regulated framework in 2026. The regulations will hopefully provide clear definitions and clarity for businesses looking to operate in the UK from a legal perspective with a drive to wider adoption in the UK - but what about the tax implications?

The FCA is the UK’s financial regulator, responsible for authorising firms providing regulated financial services, including e-money institutions and cryptoasset exchanges. This article outlines the FCA licence application process, from determining whether authorisation is required to preparing and submitting an application. It highlights key considerations such as the regulatory perimeter, available exemptions, and alternative routes like appointed representative arrangements. The process typically takes 9–24 months, requiring firms to demonstrate compliance with regulatory standards, governance, and financial requirements. Preparation is crucial, including robust policies, systems, and controls.

When pursuing a regulatory licence, the journey is often longer, more complex, and costlier than anticipated. With less than one in eight Virtual Asset Service Provider (VASP) and Payment Service Provider (PSP) applications succeeding, the key to success lies in meticulous preparation, clarity, and honesty. This article outlines an eight-stage approach to building a regulated business, from defining your value proposition to achieving profitability. It highlights the importance of strategic planning, resource allocation, and regulatory readiness—ensuring your firm not only secures authorisation but thrives in the competitive landscape.

In our previous articles, we explored the critical importance of board governance. Simply put, a strong governance framework is vital for any regulated institution, serving as the foundation for well-structured and compliant operations. Here, we focus on the role of Non-Executive Directors.

In the highly competitive and rapidly evolving fintech and financial services sectors, effective board governance is crucial for startups. Doing the right thing, the right way, from the outset. These industries are subject to stringent regulatory oversight, complex compliance requirements, and high levels of scrutiny from investors and consumers. Strong board governance not only ensures legal compliance but also fosters trust, attracts investment, and supports sustainable growth. For fintech and financial services startups, being well organised with strong governance is a strategic imperative that can mean the difference between success and failure.

Part three of our APP Fraud mini-series tackles a pressing concern for Electronic Money Institutions (EMIs) as mandatory APP fraud reimbursements come into force on October 7th, 2024. With these new rules, EMIs face increased financial risks, needing to promptly compensate victims or share reimbursement costs as a receiving institution. This article explores how APP fraud insurance could offer a lifeline, helping EMIs manage these obligations. Discover the financial impacts of the new regulations, the potential benefits of fraud insurance for mitigating losses, and practical steps to implement an effective insurance strategy. This deep dive provides essential insights for EMIs preparing for the regulatory shift.

As Finnovation.UK continues its mini-series on the new APP Fraud Reimbursement rules, we turn our attention to further exploring the impact of these changes on Electronic Money Institutions (EMIs). In 'Part One', we discussed the unique challenges EMIs face under the new mandatory reimbursement requirements that will take effect on 7th October 2024. Building on that foundation, 'Part Two' delves deeper into strategies EMIs can adopt to protect themselves and their customers amidst these evolving regulations.

The FCA’s latest report reveals a striking statistic: over 87% of crypto registration applications were either withdrawn or rejected due to weak anti-money laundering (AML) controls. With only 44 firms out of 350+ applications gaining approval, the message is clear—UK regulators are setting high standards, especially around consumer protection and AML compliance. This article uncovers the key reasons behind these failures and offers actionable guidance for crypto firms on how to strengthen their applications.

In this pre-event interview with Martin Wallraff, Director at Payments Consulting Network, Claire Conby discusses her career path, the current focus of the Digital Pound Foundation, challenges for the introduction of a digital currency, her favourite use cases and potential benefits for the UK Treasury. 

In the digital era, Authorised Push Payment (APP) fraud has become a significant threat to consumers and financial institutions alike. With APP fraud losses reaching £459 million in 2023, the Payments System Regulator is set to introduce Mandatory Reimbursement Rules on October 7, 2024. These rules aim to provide stronger protections for consumers and ensure fair compensation for victims. For Electronic Money Institutions (EMIs), these rules pose new challenges and risks, especially when dealing with agent banks and distributors. EMIs must enhance fraud protection measures to mitigate financial risks associated with these mandatory reimbursements.

On a panel about digital money's future in 2024, I highlighted the need for Central Bank Digital Currencies (CBDCs) to offer compelling use cases to encourage public adoption, emphasising the balance between innovation and choice, especially for those reliant on cash in an increasingly digital economy.

Discover how a digital Pound can enhance sustainability efforts in the UK. The Digital Pound Foundation explores the role of digital currency in promoting eco-conscious practices, including supporting the circular economy, efficient resource usage, and streamlining grant disbursements. Learn how technologies like blockchain, IoT, and smart contracts can integrate with a digital Pound to drive environmental and financial benefits for individuals and businesses. Explore key use cases and innovative solutions that a digital Pound offers for a sustainable future.

Learn how the Digital Pound can revolutionize car purchases by integrating NFTs and smart contracts. This article from the Digital Pound Foundation explores how digital money can enhance transparency, security, and efficiency in car transactions. Discover how tokenization, smart contracts, and programmable payments can streamline processes from purchasing and financing to servicing and resale, providing benefits such as real-time settlement, secure ownership transfer, and automated warranty claims.

Understand the need for a digital Pound through this insightful article from the Digital Pound Foundation. It discusses the role of Central Bank Digital Currencies (CBDCs) in providing a secure, digital alternative to physical cash, addressing challenges in public trust, privacy, and financial stability. The article highlights the importance of public education and collaboration among stakeholders to ensure a smooth transition and widespread adoption. Explore the potential use cases and benefits of a digital Pound in modernising the UK’s financial landscape.

From peer-to-peer lending and programmable payments to financial inclusion and micropayments, a digital Pound can revolutionise everyday transactions. The article delves into the benefits of digital money underpinned by DLT infrastructure, addressing challenges related to government control and privacy while highlighting opportunities for efficiency, cost savings, and innovative business models.

This article emphasises the need for efficient digital onboarding for regulated digital cash, balancing AML measures with ease of use to ensure adoption and financial inclusion, particularly for a potential digital Pound.

Central Bank Digital Currencies (CBDCs) raise significant privacy concerns as they could allow for extensive tracking of transactions by governments and other entities, unlike physical cash which offers anonymity. Balancing privacy and regulatory requirements is crucial for user adoption and trust in CBDCs.

The collapse of Terra Luna highlights the risks of algorithmic stablecoins, underscoring the need for robust regulation to ensure stability and consumer protection in the digital currency space.