Regulators have been given a checklist to follow to enable Britain's financial services industry to beat off competition from European rivals post-Brexit.
PwC - in conjunction with the lobby group for UK financial services , CityUK - has outlined eight key actions "to drive a strong, proportionate and internationally attractive regime, while applying judgement-based decision making".
Only adoption of this path will ensure Britain leads the world in financial services in the next seven years, according to the report.
The actions are split across four key attributes of the vision for the UK as a market world leader, outlined in PwC’s report, 'A vision for a transformed world leading industry and UK based financial and related professional services'.
They are: close, strategic partnership between government, industry and regulators; products and services that address key societal needs; a leading fintech and innovation centre and internationally focused, strong and agile regulation.
PwC advocates national, regional and local leaders define the positioning of regional financial centres; plan the required skills and infrastructure; and drive regional coordination between local government and firms;
Regulators should construct regulation that supports new products and business areas, and helps the industry to address challenges in society and gaps in market provision.
They should also develop a regulatory environment that encourages innovation and provides the international consistency that enables fintechs to scale up beyond domestic markets;
The UK must ensure that a strong, internationally focused regulatory environment is maintained, the report warned.
"Regulation must be agile and evolve in response to the changing nature of financial and related professional services.
"Regulation should balance the needs of customer protection with the promotion of innovation."
The report also called in the FCA to take a leading role in the drive to establish consistent global regulatory standards, and be an active advocate for an open, global financial system;
A formal and regular review process should be put int place to ensure existing and newly created regulation remains ‘fit for purpose’, it stated.
In what was perhaps a did at current regulation, the report added the watchdogs should "embed a judgement-based regulatory regime that supports more proportionate decision-making".
Processes and technologies should be "transformed" to ensure compliance is straightforward, without compromising the rigour and strength of enforcement, it stated, concluding, regulatory bodies should act to attract and retain highly skilled and experienced staff.
Andrew Kail, UK financial services leader at PwC, said: “Brexit has provided a catalyst for the UK to reconsider its future role and competitive positioning, with the potential to recalibrate the focus of its trade and investment with the rest of the world.
“If regulators take the actions outlined above –– then they will help to create an environment in which our vision for the UK financial and related professional services industry in 2025 [in which Britain leads the world in financial services] can come about.
"We believe that achievement of our vision will generate major long-term benefits for the UK economy and wider society.
"To realise this opportunity, the industry, government and regulators need to respond with purpose and energy in a coordinated way to transform the industry and ensure its ongoing relevance and success in a rapidly-changing world.”
