Mansion House Reforms and the Implications for FinTechs

Key takeaways from our latest FinTech Insights Event

Alex Speedie

July 9, 2025

Last week, we had the pleasure of hosting a select group of FinTech leaders for our FinTech Insights Breakfast. The discussion, held two weeks prior to the pivotal July 15th Mansion House Financial Services Reforms, provided a timely snapshot of a sector at a crossroads, balancing a powerful AI-driven rebound with significant regulatory and strategic challenges.

‍

Here are the key findings from our session.

‍

A Tale of Two FinTechs: The AI-Powered Rebound

After a significant drop-off in 2023 and 2024, the market is showing signs of a strong recovery. UK VC funding surged by 38% year-on-year in Q1 2025, with reports of £2 billion invested into FinTech in the first half of the year alone.

‍

However, the discussion revealed a crucial detail: this rebound is not uniform. The vast majority of new investment is flowing into AI-led businesses, while many non-AI FinTechs are still finding the funding environment challenging. As one guest observed, this dynamic is creating a tale of two FinTechs, where companies that effectively integrate AI are pulling away from the pack.

‍

The Three Fronts of the Talent War

The flow of capital is directly mirrored in the hiring market. As our guest speaker James Chaplin, CEO of Vacancysoft noted - capital investment leads to investment into human capital. Our analysis shows that this investment is being targeted at three key battlegrounds:

AI & Data:
With London positioned as a leading global AI market, vacancies for AI and Data roles within the city's FinTech sector are up nearly 50% year-on-year. The market is in a phase of rapid development, moving beyond experimental AI to focus on value innovation - the practical, applied use of AI in areas like AML automation, consumer lending, and financial research. As one attendee noted, the FCA has launched a new AI sandbox to help firms develop trusted, regulated AI solutions.
Business Development: An immense push for profitability is underway across the industry. Many private equity investors are nearing the end of their five-year fund cycles and are pressuring their portfolio companies to scale revenue and close positions. This has created huge pressure on BD, as capital is reallocated from marketing functions - which are themselves being heavily automated by AI - into sales and revenue generation. This trend is national, with regional BD job growth (up 121%) even outstripping London.
Risk & Compliance: Regulatory pressure is the primary driver here. New rules around Authorised Push Payment fraud are putting payments companies and neo-banks on the hook for fraudulent transactions, forcing them to adapt their human capital. Consequently, Risk & Compliance roles have seen a 31% increase in London, particularly in Credit Risk and Fraud. Before recent regulatory shifts, these roles made up just 4% of the FinTech white-collar workforce; that figure is now at 9% and climbing towards the 18% seen in traditional banks.

The Regulatory Horizon: What to Expect on July 15th

The upcoming Mansion House reforms will be critical in shaping the sector's future. Based on the presentation and discussion, the key areas to watch are:

BNPL Regulation: Driven by the FCA's Financial Lives study, which highlighted consumer vulnerability, these rules will likely require firms to obtain FCA authorisation and conduct creditworthiness checks. The goal is to prevent a debt bubble without stifling valuable, low-risk services.
Crypto & CARF: The UK is taking a leading role by applying the OECD's Crypto-Asset Reporting Framework (CARF) to domestic transactions. This will require wallet providers to collect full user details and report all transactions - including wallet-to-wallet transfers - to HMRC to address a potential £1 billion tax shortfall.
PISCES & The LSE: The Private Intermittent Securities and Capital Exchange System (PISCES) is designed to solve the UK's scale-up problem by creating a streamlined, regulated secondary market for shares in private companies. This is seen as a crucial response to the trend of UK firms like Wise and Revolut looking to IPO in New York.
The ECCTA Challenge: The Economic Crime and Corporate Transparency Act, while well-intentioned, is causing significant concern. The requirement for all companies to file a full P&L with Companies House from 2026 is viewed by some as giving free information to international competitors, prompting some UK firms to explore redomiciling and foreign companies to look elsewhere.

The Final Takeaway: The Energy Constraint

Perhaps the most thought-provoking insight came at the end of our session: the ultimate constraint on the UK's AI and FinTech ambitions may be energy. The massive power consumption required for data centers is creating a real-world bottleneck, where permission for new centers is being denied to avoid impacting the domestic energy supply. Whoever has the cheapest power and enough of it will have the advantage in this next stage of AI development.

‍

The upcoming Mansion House Reforms aren’t merely a policy update; they represent a critical moment of decision. The moves made over the next six to twelve months will be absolutely crucial, determining whether the UK solidifies its status as a world-leading hub or cedes ground to more agile competitors.

Share this to your socials:

Mansion House Reforms and the Implications for FinTechs

sign up to our weekly newsletter