Scale-up Unit: Banks and Building Societies

Introduction

We know that many firms have welcomed the support of the New Banks Start-up Unit in helping them to become authorised in the UK. But we have also heard that, as banks and building societies grow, some may need additional support. For example, firms tell us that they can sometimes struggle with the complexity of regulations when launching new products and that there is a strong desire to have greater certainty around their capital requirements to support discussions with potential investors. 

The Scale-up Unit was created to address this by providing a dedicated point of contact to tackle these challenges. On this page you can find information about new initiatives the Scale-up Unit is undertaking for growing banks and building societies, as well as other relevant existing PRA and FCA initiatives. You can also find out more about the work of the Scale-Up Unit for Insurers and FCA solo-regulated firms in the ‘Related Links’ section. 

What will the Scale-up Unit do for Banks and Building Societies?

The Scale-up Unit will provide a dedicated point of contact to help banks and building societies that are looking to scale up by providing support on topics including:

Capital reviews: the Scale-up Unit will work to facilitate out-of-cycle capital reviews for firms that are rapidly growing, or whose business models have changed significantly;

Regulatory processes: the Scale-up Unit will help firms to understand which regulatory processes would be relevant to their scaling-up plans and to co-ordinate regulator interactions ahead of, and during the process of, formal submission, for example on variation of permission (VoP) applications;

Product innovations: for firms looking to launch a new or innovative product or service, the Scale-up Unit will support an early-stage discussion on these plans and the corresponding regulatory treatment; and

The impact of new policy proposals on Scale-up firms: if there are aspects of new policy which are relevant to, or could impact, scaling-up firms, the Unit will provide a means to facilitate information-sharing for the purposes of the PRA and FCA’s policy-making processes; and

Sector engagement: The Scale-up Unit will support ongoing dialogue between regulators, firms and the wider scale-up eco-system.

We’re also interested in hearing your views on where the Unit could be doing more to explore opportunities for greater proportionality and efficiencies. You’ll find details on how to engage with us below.

How is this different to engagement with our existing supervision teams?

The core principles of the PRA and FCA’s supervisory approaches will remain the same (you can find out more about this in ‘Related Links’). The Scale-up Unit will work in tandem with existing supervision teams and regulatory processes where they touch on specific aspects of your plans to scale up. The Scale-up Unit will not provide general regulatory information or cover topics outside of this, and it is not intended to be a substitute for discussions you would typically have with existing supervision team contacts. The Unit will not lower regulatory standards, or guarantee a successful decision, and engagement is not an endorsement of your products or services. 

Which Banks and Building Societies are eligible to access the Scale-up Unit?

The Unit is specifically designed to support firms that are already scaling up within their chosen markets.

As such, banks and building societies which broadly align with the following criteria can access the Unit:

1. You are in scope of PRA/FCA dual regulation – this aspect of the Scale-up Unit is only for firms that are already authorised by both regulators;
2. You have been operating for more than five years, so are not part of the New Banks supervisory approach;
3. You are in a period of sustained growth e.g. income growth of at least 20% over a three year period, and are looking to continue this upward growth trajectory; and
4. You have a genuine need for support from the regulators to scale up and are not already of the size and scale where accessing sufficient resources via other channels would be feasible. When considering requests for support, the Unit will be mindful of (i) the size and complexity of the firm’s activities; and (ii) the extent of its available financial and non-financial resources or its ability to access support from third parties. As such, we expect the Unit to be of particular interest to firms with a balance sheet in the range of £3bn to £20bn.

We recognise that building societies typically have different business models and growth trajectories to banks and, as a result, may not meet the criteria set out above. As set out in the PRA and FCA's Mutuals Landscape Report, the regulators’ ambition is to facilitate the long-term sustainable growth of the sector and ensure that mutuals have the same opportunities to compete as other firms. Consistent with this, we welcome expressions of interest from building societies that may not fully meet these criteria but have credible growth ambitions, are committed to growing in a safe and sustainable manner and would benefit from engagement with the Scale-Up Unit. As a guide, we would generally expect participating building societies to have total assets more than £1 billion and projected Net Interest Income growth of more than 15% over a three year period.

If you meet the above criteria and are interested in joining future cohorts, please email us at the address below setting out how you meet the criteria outlined and details of the areas where you require support from the Unit e.g. product innovations or regulatory processes. The Unit is open to expressions of interest to join a second cohort from 1 September 2026 to 30 September 2026.

Firms participating in the initial cohort

The Scale-up Unit initially launched in the banks and building societies sector in January 2026 on a limited basis with a small cohort of firms, who we have engaged with to both support those firms and further develop the work of the Unit. The following six firms are participating in the initial cohort from January 2026:

• Allica Bank
• ClearBank
• Monument Bank
• Nottingham Building Society
• OakNorth Bank
• Zopa Bank

How we have worked with firms so far

The first Scale-Up Unit cohort has demonstrated the value of early and structured dialogue between scaling firms and regulators. Through enhanced bilateral engagement, including dedicated points of contact at both the PRA and FCA, firms have been able to discuss strategic priorities, emerging risks and regulatory questions at an early stage as they consider product innovations and expansion plans. This has provided greater clarity and certainty as firms look to innovate, scale and expand their services in the UK and internationally.

We have also seen significant value in bringing together firms with a diverse range of business models. Structured roundtable discussions have enabled greater focus on, and provided valuable insights into, key issues facing scaling firms, including artificial intelligence, payments innovation, SME finance and regulatory thresholds. These discussions have also encouraged greater peer collaboration on common challenges, including operational resilience and cyber security.

The case studies below provide some examples of how firms have engaged with the Scale-Up Unit and the benefits that can arise from early and more structured regulatory engagement. They also illustrate the wider value of the Unit, not only in helping firms navigate the regulatory framework, but in improving regulators' understanding of the opportunities and challenges faced by growing firms. Insights from this engagement will help inform the future development of the Scale-Up Unit and support a regulatory approach that remains responsive to innovation, growth and evolving business models.

Other existing initiatives to support firms looking to scale up

Listed below are some of the steps we have already taken to advance the secondary competitiveness and growth objective (SCGO), which are relevant to financial services firms looking to scale their businesses in the UK. Together with the work of the Scale-up Unit, we believe that these, and future initiatives, will deliver significant simplifications and efficiencies for banks operating in the UK, while maintaining resilience – a necessary foundation for sustainable economic growth. 

You can find out more about these initiatives by following the links below:

Strong and Simple: the regime delivers a more proportionate and tailored approach to prudential regulation for non-internationally active Small Domestic Deposit Takers (SDDTs), while maintaining their resilience. The regime has delivered material reductions in liquidity and disclosure requirements and in January 2026 we published final rules introducing material simplifications across capital framework, which will take effect on 1 January 2027.

Authorisations timelines: the PRA and FCA have announced that we will be reducing timelines and streamlining processes for authorisations in a number of areas including new, non-statutory targets that go beyond the Government’s proposed new deadlines in legislation where possible. These changes will promote substantially quicker determinations of applications for firms in the UK. 

Senior Managers and Certification Regime (SMCR): In April 2026, the PRA and FCA published the first phase of reforms to make the regime more efficient and proportionate, while maintaining individual accountability. The changes streamline annual checks, reduce overlapping certification requirements, and provide greater flexibility around temporary appointments and reporting. The PRA plan to consult on wider reforms.

Future Banking Data: We have started reducing reporting requirements through the Future Banking Data (FBD) programme. The first stage of the reporting reductions, which were implemented with effect from 31 December 2025, should cut costs by around £26 million annually. We are now engaging closely with industry to develop this work further, including through our recent discussion paper DP1/26, and expect that larger steps forward in the efficiency of regulatory reporting will follow. 

MREL: the final policy was updated in response to firm and industry feedback, which included raising the total assets indicative thresholds for a transfer or bail-in preferred resolution strategy from £15-25 billion to £25-£40 billion. This provides smaller firms with the room to grow before potentially being in scope, and the Bank has committed to updating the threshold every three years to ensure it keeps up with nominal growth.

Internal Ratings Based (IRB) approach: in January 2026, the PRA introduced an enhanced process for new IRB permission applications and permissions to make material model changes. We are also exploring a potential simplified IRB approach for residential mortgages to make the approach more accessible to medium-sized firms and reduce the resources required to obtain permission.

Groups and consolidation: we have added new information to our Regulatory expectations webpage which explains PRA’s existing policies and approach to supervising UK consolidated groups. This may be of particular interest to scaling banks that are looking towards overseas expansion.

This is not an exhaustive list of the work we are doing in this area – you can out find out more about the work of the PRA including our open consultations and discussion papers in ‘Related Links’.

Contact us

You can get in contact with us at the following address: BankScaleupUnit@bankofengland.co.uk