Andrew Wigston, head of the PSR's Supervision and Compliance monitoring division, reflects on our industry engagement with innovators and firms in the fintech community, and the roundtable we hosted at FTT Fintech Festival. 

We were delighted to host a roundtable on 10 November at FTT Fintech, on fostering innovation in UK payments. 

In May we announced our enhanced focus on innovation, in close collaboration with the FCA. Since then, we’ve been working with the FCA on providing clarity and steers to innovators, contributing to FCA-led initiatives such as sandboxes and sprints, and supporting proportionate regulation that improves outcomes and drives economic growth. 

We and the FCA have also been engaging with innovators and firms in the fintech community – with generous support from trade associations – to better understand enablers and barriers to innovation in payment systems.

The FTT Fintech roundtable built on insights gathered throughout the year from stakeholders across the ecosystem. Our innovation conversations have given firms the opportunity to share what matters most to them and what they need from the regulatory environment in order to innovate and thrive.  

We explored what may be holding innovation back, as well as opportunities across infrastructure, scheme rules and operation and market incentives – that could unlock progress. 

Firms shared the following priorities from their perspective: 

  • Healthy and effective competition  
    To foster innovation and choice, firms highlighted the importance of fair market dynamics. Ensuring alternative payment methods are viable, and that pricing structures are transparent, will help drive consumer and merchant adoption. 

  • Realising the potential of open banking 
    Scalability remains a challenge in open banking because standards are fragmented and user experiences are inconsistent. A harmonised framework, backed by clear commercial and liability models, is essential to unlocking open banking’s full potential. 

  • Advancing digital identity and financial crime controls 
    There is strong interest in modernising identity verification and anti-money laundering processes. Firms are keen to explore reusable identity solutions and smarter controls that reduce duplication while maintaining robust consumer protection. 

  • Reducing infrastructure integration barriers 
    High integration costs with payments infrastructure and other interoperability issues (e.g. lack of common standards) are still slowing innovation. Firms value standardisation and enhanced testing environments – such as sandboxes – to accelerate deployment and reduce complexity. 

  • Strengthening data sharing to combat financial crime 
    Secure and collaborative data sharing is foundational to a resilient payments ecosystem. Enabling payment providers to share intelligence and track activity across channels will help identify suspicious activity faster, reduce fraud, and protect consumers.  

  • A regulatory environment that lets innovators access the market with confidence 
    Firms, especially smaller and emerging ones, want a regulatory environment that allows them to enter the market easily. Predictable, proportionate and clear rules and timelines will help them plan and grow. 

These insights are shaping our collective thinking on innovation and the future payments regime, and they echo wider industry discussion across the UK payments landscape. 

They’re also shaping our contribution to delivery of the National Payments Vision – building a payments ecosystem that is inclusive, competitive, and future-ready.

The National Payments Vision and Payments Vision Delivery Committee prioritise infrastructure that enables innovation, supports competitive overlay services like open banking, and ensures fair access.  

As digital payments grow and there’s more demand for alternatives to cards, these insights will help ensure regulatory and infrastructure developments reflect what firms need to succeed.  

Why innovation is important to us 

Promoting the development of and innovation in payment systems – particularly the infrastructure that underpins them – is central to our purpose and a core statutory objective. We are the only UK financial regulator with innovation as a primary goal – and it is something we have consistently delivered on including through our close working with the FCA. Ahead of consolidation, we’re exploring new ways to strengthen this support.

Our focus on innovation remains crucial as we prepare to deliver the National Payments Vision and will be strengthened by our consolidation with the FCA. This is an exciting opportunity to leverage the FCA’s extensive innovation initiatives and drive even greater progress.

Our ambition is clear: create the right conditions for innovation to thrive. By doing so we enable firms to compete effectively, improve consumer choice and confidence and support a dynamic ecosystem that fuels sustainable economic growth.  

This isn’t just a principle – this is evidenced by the actions we have taken: 

  • With the FCA, advanced open banking as a viable alternative to cards, unlocking new business models and consumer choice. 

  • Opened up access to payment systems 

  • Mandated Confirmation of Payee, and later expanded it to cover 99% of Faster Payments and CHAPS. 

  • Introduced the world’s first mandatory reimbursement rules to tackle APP fraud. 

We are clear that innovation in payments isn’t just a regulatory priority – it’s a shared endeavour. Through collaboration, we can create open, fair and trusted environments that enhance firms’ ability and incentives to innovate so they can compete and grow.

Looking ahead, working with the FCA, we can remove barriers, unlock opportunities and ensure the UK remains a global leader in payments innovation – delivering outcomes that benefit businesses, consumers, and the wider economy.