24AUG

FCA takes five scale-ups on its own

3 min read

16:40UTC

The Financial Conduct Authority added ClearScore, Modulr, Teya, Urban Jungle and Zilch to its Scale-up Unit, its first cohort of firms it regulates alone.

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Key takeaway

Five firms entered the FCA Scale-up Unit as its first solo-regulated cohort.

The Financial Conduct Authority (FCA) added ClearScore, Modulr, Teya, Urban Jungle and Zilch to its Scale-up Unit on 7 August, the first firms it regulates on its own rather than jointly with the Prudential Regulation Authority⁠¹. The Scale-up Unit gives fast-growing firms a dedicated supervisory contact and earlier access to the regulator on questions that would otherwise wait in a queue.

Solo regulation changes the supervisory relationship in one specific way. A firm supervised jointly answers to the FCA on Conduct and to the Prudential Regulation Authority on capital and resilience, which in practice means two sets of questions, two timetables and two views on the same growth plan. Confining the relationship to one regulator does not lower the standard, but it does remove the coordination cost, and coordination cost is a real constraint on a company adding customers faster than it adds compliance staff. The FCA has been building this kind of structured access for two years, from the stablecoin sandbox it opened to Revolut and three others in June to the AI Lab cohorts running alongside it.

A week later the skills side moved. TechFirst, the government's AI skills programme, launched a three-week apprenticeship pilot on 14 August for up to 70 people aged 16 to 21 in Wigan, Blackburn and Blackpool, delivered by IN4 Group and fronted jointly by the AI minister and the Culture Secretary⁠². Seventy places across three towns is a pilot in the literal sense, and its value is whether it produces a repeatable model rather than seventy trained young people.

Deep Analysis

In plain English

Financial companies in the UK are usually regulated by one or two watchdogs depending on what they do. If a company takes bank deposits, it is supervised jointly by the Financial Conduct Authority, which protects consumers and ensures fair Conduct, and the Prudential Regulation Authority, which makes sure banks stay solvent. Companies that do not take deposits, like most fintech apps, only answer to the FCA. Five fast-growing fintechs, including the credit-checking app ClearScore and the buy-now-pay-later firm Zilch, have just moved into a new FCA 'Scale-up Unit', a team dedicated to supervising firms as they grow quickly, rather than being handled by the FCA's general casework teams. Separately, a three-week pilot apprenticeship scheme called TechFirst started training up to 70 young people, aged 16 to 21, in AI skills across Wigan, Blackburn and Blackpool, three towns not usually associated with tech hiring.

Deep Analysis

Root Causes

The FCA created the Scale-up Unit for firms it already regulates alone, without a banking licence requiring joint Prudential Regulation Authority oversight. ClearScore, Modulr, Teya, Urban Jungle and Zilch all operate as authorised payment or e-money institutions rather than banks, which is the structural reason they qualify for solo rather than joint supervision.

TechFirst's apprenticeship pilot, running the same week in Wigan, Blackburn and Blackpool, sits inside the same policy logic from a different angle: both moves target the stage just before a company or a worker is fully established, betting that lighter-touch intervention earlier produces better outcomes than waiting until firms or workers are already at scale.

What could happen next?

Precedent
A dedicated Scale-up Unit gives the FCA a template for supervising other growth-stage fintechs without Prudential Regulation Authority involvement.
Opportunity
Up to 70 young people in Wigan, Blackburn and Blackpool gained a route into AI skills training through TechFirst outside the usual London-centred pipeline.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: The FCA created its Innovation Hub in 2014 and launched its regulatory sandbox in 2016, deliberately separating fast-growing, technically complex firms from the standard supervisory queue; this Scale-up Unit repeats that logic at a later company stage, for firms that have outgrown a sandbox but still need faster answers than the standard book of firms gets.

Counter-parallel: Not every regulatory carve-out sticks. The FCA has previously folded early sandbox cohorts back into general supervision once firms matured past the growth stage, so a dedicated unit is not guaranteed to be permanent; whether Scale-up Unit status survives if any of these five firms is later authorised as a bank remains untested.

Consensus view: The Financial Conduct Authority's decision to regulate ClearScore, Modulr, Teya, Urban Jungle and Zilch on its own, rather than jointly with the Prudential Regulation Authority, follows the split most UK fintechs already sit under: firms without their own banking licence answer only to the FCA, while deposit-taking banks answer to both regulators.

Counter-view: No published commentary assesses whether solo FCA oversight through a dedicated Scale-up Unit changes outcomes for these five firms, rather than simply changing which regulator's letterhead the correspondence carries. The unattributed case that it matters: a single-regulator relationship removes the coordination lag that comes from two supervisors agreeing a position before either replies to a firm.

Key tension: Whether a dedicated Scale-up Unit produces faster regulatory decisions for growth-stage fintechs, or whether the change is organisational rather than substantive.

Sources:Financial Conduct Authority·UKTN

Mentions:Financial Conduct Authority →TechFirst →Wigan →Blackpool →Prudential Regulation Authority →Conduct →Revolut →

First Reported In

Update #14 · UKRI's sponsor department no longer exists

Financial Conduct Authority· 24 Aug 2026

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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.