UK Retail Finance Horizon Scanner - May 2026

In the latest edition of our UK Retail Finance Horizon Scanning report, we highlight recent industry updates and developments emerging in the following areas:

• Consumer credit: Motor finance remains in focus, with the FCA continuing to defend its proposed compensation scheme amid legal challenge while requiring firms to press ahead with preparations and complaint handling. The Government has also confirmed significant reform of the Consumer Credit Act, signalling a shift towards an FCA led, outcomes based regime. The FCA is further consulting on simplifying financial promotion rules to better align with the Consumer Duty.
• Innovation and technology: The FCA continues to support innovation through initiatives such as the expansion of its Scale Up Unit and ongoing work on open finance, including its roadmap, TechSprints and Smart Data Accelerator. These developments are expected to drive further growth in data enabled financial services.
• Conduct and governance: Recent FCA activity highlights continued focus on sanctions systems and controls, with firms expected to strengthen due diligence, monitoring and oversight. Broader reforms, including the Enhancing Financial Services Bill and proposed AML supervisory changes, alongside new guidance on non financial misconduct, reinforce expectations around governance, accountability and culture.
• Consumer Duty: The UK Financial Inclusion Strategy signals a more coordinated approach to improving access to financial services, with implications for how firms support vulnerable customers and deliver inclusive, outcome focused products in line with the Consumer Duty.
• Mortgages: Mortgage reform remains a priority, with the FCA progressing its Mortgage Rule Review and setting out plans to improve access, support innovation and better serve first time buyers and later life borrowers. Further consultations are expected during 2026.