The King’s Speech 2026: A lukewarm response from the financial services sector

Buoyed by a reign-defining speech to Congress on 28 April 2026, King Charles III returned from the US to the UK for the State Opening of Parliament. The King’s Speech, read to the Lords Chamber on 13 May, set out the programme of legislation the government intends to pursue in the forthcoming session.

A wave of landmark laws for the financial services industry were announced, including the Financial Services Bill and a crackdown on late payments — both designed to create a more robust and energetic UK economy.

The plan itself, however, received mixed reviews from the financial services community — flavours of which Finextra has captured in the days following its unveiling. Stakeholders — from fintechs, to business management consultants, to law firms — commended the intent but called for stronger and more decisive change to power growth.  

The Financial Services Bill

One of the key criticisms of the UK’s regulatory landscape for some years has been that it is too complex and cumbersome for supporting innovation. Attempts were made in the King’s Speech to address this.

The new Financial Services Bill, for example, merges the Payments Systems Regulator (PSR) with the Financial Conduct Authority (FCA). The Bill also reforms the Financial Ombudsman Service, which resolves disputes between consumers and City firms, and looks to consolidate anti-money laundering (AML) supervisions. 

Phil Bricknell MP, Chair of the All-Party Parliamentary Group (APPG) on Anti-Corruption and Responsible Tax, commented: 

"The UK's current AML framework is a fraying tapestry that attempts to weave together 22 supervisory bodies, creating confusion and inconsistency in enforcement across different industry sectors. The APPG on Anti-Corruption and Responsible Tax welcomes confirmation that the Financial Services Bill will consolidate AML and counter-terrorism financing supervision under one roof, with the FCA. We keenly await further details on how this change will work in practice, and on how much more resource will be made available to the FCA to take on the extra workload." 

Janine Hirt, CEO of Innovate Finance, said:

“The King’s Speech unveiled a range of measures to streamline UK regulation that we at Innovate Finance have advocated for with our Unicorn Council for UK FinTech and wider membership base. This includes faster authorisations, a more proportionate approach to approval and certification of senior managers, and a more focused role for the Financial Ombudsman to reduce the risk of acting as a shadow regulator.

“As the FCA and Bank of England take on more powers and responsibilities in payments,” she added, “there is now a strong case for giving the Bank a statutory objective to promote growth, competition, and innovation in payments systems and regulation. Given the increased need to build growth and resilience, now is also the time to revisit how best to combine regulators’ independence with democratic oversight and the ability of a government to set wider public policy priorities that cut across regulatory responsibilities.”

Kristaps Zips, UK CEO at payabl. added that “the decision to move the PSR’s responsibilities into the FCA will be welcomed by many in the payments and financial services industry as a step towards reducing the burden on businesses.

“The current system has meant firms are often dealing with a complex regulatory environment and multiple organisations at once,” she continued, “costing businesses time, resources and money. Consolidating that oversight into a single regulator gives the FCA a clearer picture of the full payments landscape, fostering better informed regulation as a result.”

Laurent Descout, CEO and co-founder of cross-border payments fintech Neo, agreed:

"The government’s long-awaited plans to abolish the PSR and merge it into the FCA are a welcome step for the UK payments sector. A more streamlined regulatory framework will help create clearer accountability for driving improvements across the industry.

"As reforms now progress, it is essential that fintech firms, which are improving efficiency, reducing costs, and expanding access to financial services, are given the right regulatory environment to thrive,” continued Descout. “A clear and forward-looking approach will help maintain the UK’s position as a global leader in payments and ensure a competitive, dynamic market that benefits businesses and consumers alike.”

Charles Buckworth, partner and head of fintech at RPC, however, questioned whether the government's ambition on financial services competitiveness will be matched by decisive action:

"Many in financial services will note that, despite repeated discussion of regulatory reform and competitiveness in recent months, financial services measures did not feature prominently in the King's Speech…It is difficult to avoid the question of whether the government is truly rising to the challenge of offering full-throated support to a sector that will be central to driving investment, innovation, and long-term economic growth in the UK.”

The Regulating for Growth Bill

Having near-flatlined since the 2008 credit crunch, UK productivity must be kickstarted once more. One of the ways the government is seeking to do this is through the Regulating for Growth Bill. The proposed legislation aims to boost economic growth by shifting the focus of major regulators so that, alongside their safety or environmental duties, they actively support investment and market creation.

Leigh Thomas, VP of EMEA at Intuit, noted that the Regulating for Growth Bill announcement “brings us one step closer to securing the UK's future as an AI-confident G7 economy by 2035, and will increase trust in AI products and services.”

Indeed, awareness in AI is now universal and adoption has reached scale. Data from Intuit’s AI Impact Report reveals that among the 70% of UK businesses now using AI, 43% report increased revenue; more than a quarter have reduced their outgoings; and a similar proportion say it is shortening their working day.

“Yet, despite these positives, a gap remains,” Thomas explained. “Many businesses are still limiting AI to lower-risk tasks, rather than embedding it where it can drive real growth. Only 7% are using it extensively in their day-to-day operations — significantly behind the US and Canada where that number is closer to 12%.”

According to Thomas, formalising safeguards will be an important step in addressing these concerns:

“Legislation alone is not enough,” she concluded. “As this Bill progresses, it must be paired with investment in skills and support to help smaller businesses become AI-literate. Targeted incentives will be essential to ensure they can fully adopt AI and drive economic growth.”

The Small Business Protections Bill

Another initiative announced by King Charles was a crackdown on late payments, which will involve issuing penalties to larger companies that regularly fail to pay suppliers on time. The Small Business Protections Bill, or the Late Payments Bill, promises a 60-day payment cap, mandatory 8% interest on late payments, and new enforcement processes.

Eduard Panteleev, co-founder and CEO of ANNA Money said that “payment delays cause lost productivity, a disruption to vital cash flow and create enormous stress on the country’s entrepreneurs who are already battling rising costs, tax changes and growing administrative pressures.

“As the heartbeat of the UK economy,” he continued, “small business owners deserve to be prioritised by government legislation and I hope to see these changes make a meaningful difference, particularly for sole traders and microbusinesses operating on the tightest of margins.”

Greg Watson, CEO of Napier AI, agreed, noting that the “continued focus on tackling late payments and strengthening the UK’s financial services sector is an important step towards supporting economic stability and business growth.”

Sebastien Marchon, CEO of Rydoo, however, argued that prevention of late payments will be more effective than imposing fines. Marchon called for greater use of automation within finance departments to make invoice processing and approval almost immediate — protecting supplier relationships and reducing the £11bn late payments problem.

As payment performance becomes more visible with regulation, firms are likely to boost uptake of automation tools to ensure they don’t fall foul and owe penalties, he suggested:

“The [Late Payments] Bill is a welcome step for UK companies struggling due to late payments. However, in addition to guardrails like mandatory payment terms and penalties included in legislation, we need to see a greater level of automation within finance departments to help to reduce late payments.

 “The 38 small firms closing every day due to cash flow problems need suppliers who pay on time, not suppliers who eventually pay fines,” he continued. “Automation can make invoice processing and approvals almost immediate, creating predictable payment cycles that protect supplier relationships and minimise the reputational damage of late payments.”

Descout agreed that the Late Payments Bill is needed to better support UK SMEs:

"For too long, small businesses have borne the brunt of poor payment practices by large corporations, with missed or delayed invoices causing serious harm to cash flow, investment and day-to-day operations.

"Many of the same large firms responsible for late payments are also favoured by traditional banks, which still rely on outdated legacy systems and are slow to respond when issues arise,” he added. “When failures occur, it’s often these big clients who are prioritised, while SMEs are left waiting. This has created a two-tier system where those most reliant on timely payments, such as SMEs, are the least supported by the infrastructure.”

Sheila Flavell, COO of FDM Group, summarised: “The government’s crackdown on late payments is an important intervention to support smaller businesses, in particular, but also acts as a wider signal that the UK’s payments infrastructure needs to modernise and that businesses don’t currently have the workforce to deliver the required transformation.”

The Digital ID update

With the aim of modernising how citizens interact with public services, King Charles confirmed that his ministers would “proceed with the introduction of Digital ID”. While contentious among some for security and privacy reasons, the Bill is intended to drive access to digital services.

Hirt argued that “Digital ID and verification is a critical building block for finance and technology innovation, to enable easy and safe access to services and combat fraud. Government work on digital identity for public services can support this if accessed via a wide range of digital wallets and our trusted, world leading verification providers.”

Zips also welcomed the Bill’s inclusion, but urged the industry not to lose sight of the full potential of Digital IDs:

"The opportunities extend far wider than just the right-to-work, including combatting financial fraud, with payable. research showing that four out of five merchants would welcome Digital IDs as a means of reducing fraud for their business. For fintechs, the benefits can go further still, from streamlining KYC and customer onboarding to reducing the cost and complexity of identity verification.”

“As this Bill progresses,” Zips added, “it's vital that the conversation includes these wider use cases and gives people the chance to understand how voluntary use of Digital IDs could make every day experiences, like shopping online and verifying identity at the checkout, safer and more seamless."

Joe Andrews, CEO of Aztec Labs, however, was more skeptical of these developments, warning that the UK approach to Digital ID is a "ticking time bomb":

"A framework that stores sensitive personal information in third-party servers is a data breach waiting to happen," he said. "The EU is leading with a tech-first approach, embracing strong cryptographic privacy guarantees via zero-knowledge proofs. Meanwhile the UK, with its Online Safety Act, is banning end-to-end encryption and throwing away our opportunity to lead. Digital ID must embed strong, cryptographic privacy protections and not enable data honeypots at intermediaries, or we will create an Orwellian dystopia for future generations."

Technocratic incrementalism or a steady step?

Though the King’s Speech was overshadowed in the media by mounting geopolitical turmoil and arguments around Labour’s longevity, policies with promising implications for growth and infrastructure were put forward for the forthcoming session.

From a regulatory perspective, significant steps were taken to consolidate the landscape, though some within the industry have argued that making a difference to competitiveness, innovation and growth necessitates bolder, structural action. With an increasingly jittery bond market, the UK must position itself as a global leader in financial innovation and collaboration — and signal to the economy that it is pro-business.

For the government, the Bills set down by the King on 13 May form part of a long-term programme to deliver economic strength, upscaled public services, and systemic security. Delivering on these objectives may prove existential for the governing party.