Support for new and growing firms One issue the Kalifa Review raised that we are working to address is the “scale up” challenge; that is, how successful start-ups can scale up into larger companies that play a more significant role in sectors of the UK financial system that still remain relatively concentrated. This is a challenge the PRA, along with the FCA, has been seeking to address for some time. We are working to actively improve how we tailor our supervisory approach to support growing firms.15  We provide support and proportionate supervision to start-up banks. This is a more resource-intensive supervisory approach than we deliver to larger, more established banks, and we provide a relationship manager and team that get to know each start-up bank and keep a close eye on emerging risks. We set out our expectations, and the sort of progress we expect firms to make, in the Supervisory Statement published on 15 April.16 Furthermore, at the same time we re-launched the New Banks’ website which provides a lot more information around the standards we expect at authorisation and beyond. The PRA is also looking at creating a ‘Strong and Simple’ regime for smaller banks as well as potential changes to Solvency II.17 This will help enable a dynamic and diverse banking sector while maintaining firms’ resilience. For example, as part of that we will look to simplify the way we approach certain rules such as the approach to capital.

This should help support a proportional approach to regulation, as part of the Future Regulatory Framework proposals set out by the Treasury.18 This new framework would make it easier for our regulation to adapt to innovation, and deliver a more tailored regime for firms, responding dynamically to new challenges. We are also looking forward to working with the FCA as their Scalebox develops. We continue to work closely more generally with them on the supervisory approach to new and growing dual-regulated firms. 14  https://www.bankofengland.co.uk/prudential-regulation/publication/2019/outsourcing-and-third-party-risk-management https://www.bankofengland.co.uk/speech/2020/sarah-breeden-climbing-mountains-safely 16 https://www.bankofengland.co.uk/prudential-regulation/publication/2020/new-and-growing-banks 17 https://www.bankofengland.co.uk/speech/2020/sam-woods-city-banquet 18 https://www.gov.uk/government/consultations/future-regulatory-framework-frf-review-consultation 15  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  Cross-authority and international collaboration  The Bank is just one of many institutions with a role to play in the evolving fintech landscape. And we regularly work with other public authorities as we fulfil our role, including the FCA, the Treasury, and Payments and Competition authorities. A number of institutions have put out proposals and consultations on how the UK’s regulatory framework should adapt to support financial innovation. The Payments Landscape Review, led by the Treasury, has gathered evidence across the breadth of the payments sector to understand the rapid technological developments and what that might mean for regulation. 19 The Treasury has also launched a consultation on the regulation of stablecoins,20 and the FPC has set out its expectations for stablecoin-based payment chains.21 And Parliament has launched an inquiry into the Future of Finance in the UK.