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How will the Conservatives and Labour help support the fintech sector?

Posted: 02/07/2024

The Conservatives’ promises for fintech are largely contained within the Edinburgh Reforms, the Mansion House Compact and the Future of Payments Review, which taken together set out what we can expect for fintech if the Conservatives were to continue in government.

Interestingly, Labour’s approach to fintech and financial services more generally does seem to be ‘steady as she goes’, building on what successive Conservative governments have already put in hand. Judging from Labour’s ‘Financial Growth: Labour’s plan for financial services’ and Rachel Reeves’ Mais lecture, Labour will maintain continuity and build on existing initiatives such as open banking, open finance, and contingent reimbursement to combat APP fraud.

Regulatory framework

Labour proposes a ‘mission-driven government’ approach, a key pillar of Labour’s economic growth plan which establishes a new ‘Regulatory Innovation Office’ which, amongst other things, will track the performance of industry regulators such as the Financial Conduct Authority, the Prudential, and the Bank of England against certain mission related goals.

At first glance, this might seem like a new approach. However, the Conservatives have not been immune to adding mission driven goals to inform regulator duties. Labour does however plan to take this approach further and embed ‘missions’ within the private sector. For example, under Labour plans, UK financial institutions must implement ‘credible transition plans’ that align with the goal of the Paris Agreement to limit temperature increase to 1.5% above pre-industrial levels. The FCA and the Prudential will be obliged to oversee these transition plans and will be tracked by the new Regulatory Innovation Office (see above). Along with its intention to require the Bank of England to give due consideration to climate change as part of its mandate, this forms a key pillar of Labour’s growth plans, aspiring to make the UK a world leader in ‘green finance’.


According to BDO’s FraudTrack 2024 report, the amount of payment fraud committed in the UK more than doubled to £2.3 billion in 2023, marking the second biggest year for scams in the last two decades. This is a serious issue, as erosion of trust in the UK’s payment systems will impact growth.

Labour’s approach to combatting fraud, particularly fraud in the payment systems, is much the same as the Conservatives. Currently, the Payment Systems Regulator is introducing a new mandatory requirement for all UK payment service providers to reimburse customers who become victims of authorised push payment fraud, with Pay.UK working hard behind the scenes to deliver the necessary changes to the Faster Payments scheme.

Importantly, third party payment initiators (eg using open banking) who have access to and hold funds during the payment journey will be liable for reimbursement. This is highlighted in the government’s Future of Payments Review and is likely to be the next focus in the battle against authorised push payment fraud, irrespective of whether the Conservatives or Labour are in power. This is particularly so, given that both Labour and the Conservatives see open banking and its little sister, open finance, as a model for future innovation in the financial sector.


If the party were to remain in government, the Conservatives would continue to build on the Edinburgh Reforms, for example, to ensure that Basel III capital requirements do not inhibit SME lending. Labour have committed to much the same thing.

The Conservatives have also pledged to work with the City to introduce the Mansion House Reforms, including encouraging greater investment by pension funds in UK companies. An interesting Conservative proposal, given the relative decline in availability of capital in the UK, is an ‘Intermittent Trading Venue’, to enable unlisted companies to raise funds on an ‘occasional’ basis, without hitting the regulatory requirements of a full list. The aim of these initiatives is to unlock £50 billion of investment into high growth companies.

Labour will also likely act to encourage pensions funds to invest more in UK companies and has pledged to create a national wealth fund which will play a role in ‘green finance’ (see above) and other infrastructure investment initiatives. The national wealth fund is to be financed through a time limited windfall tax on oil and gas, amongst other things.

Data and AI

The UK Data Protection and Digital Information Bill (see analysis from the data protection team here), did not make it through the pre-election wash up despite being weeks away from royal assent. It will no doubt be resurrected should the Conservatives manage to stay in government. Labour did not oppose much of the bill (it did however oppose certain unpopular provisions that allowed the DWP to access people’s bank accounts, which is possibly why the bill failed at the last hurdle). Given Labour is keen to recalibrate the UK’s relationship with the EU, it is unlikely we will hear much more about reform of the UK GDPR under a Labour government.

The Conservative government published its AI white paper in March 2023 (see a previous analysis here). There were no plans at the time to introduce new legislation to deal with AI. Instead, the white paper set out five principles of AI governance, which the UK’s existing network of regulators were to use to produce context specific guidance on a sectoral basis.  The government would then ‘wait and see’ if this left gaps in the powers of the regulators.

Labour, by contrast, considers the existing voluntary approach to AI inadequate and is seeking a more formal regulatory regime around AI. Given Labour’s wish to improve the UK’s relationship with the EU, there is every chance it will adopt a regulatory regime that closely follows the EU’s Artificial Intelligence Act regulation, which was approved by the Council of the EU on May 1, 2024.


The digital economy has been epitomised by the roll out of ubiquitous digital infrastructure delivering social platforms, business marketplaces and a whole host of new business models. The next 15 years will be defined by the data that flows through the digital infrastructure, together with data infrastructure such as open data and other data standards, AI and blockchain. Whichever party is in power after 4 July, we can expect to see more digital goods and high-quality data from multiple sources driving value for consumers and businesses.

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