The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

This blog is a collaboration between Kantilal Pithia, Partner, Supriya Manchanda, Partner, and Chris Laverty, Partner, at Grant Thornton.

With such broad challenges – and far-reaching implications – banks need to identify the key priorities for the year ahead and focus their efforts for growth.

Motor finance

The redress scheme is shaping up to be more complex than many had anticipated and will move quickly once the final rules are live. Based on the consultation, firms will have an initial three-month period to contact complainants and redress calculators could potentially be needed in the Spring. In addition to the technical requirements, operational costs and redress payments, data will be a key challenge – especially given the long timeframe for the scope of redress. 

Basel 3.1 and SDDT

The final rules for Basel 3.1 and the Small Domestic Deposit Takers Regime (SDDT) offer greater confidence for UK banks finalising their plans for the new prudential regimes. These largely take effect from 1 January 2027, with the exception of the simplified approach to market risk, which has been bumped back to 1 January 2028.

Recovery and resolution 

This year marks the third resolvability assessment from the Bank of England, focusing on restructuring planning and how key dependencies can impact capabilities. Firms must also address any findings and required improvements from the previous assessment in 2024. Resolvability reports are due for submission in October 2026, and banks should pay particularly attention to the quality, frequency and granularity of underlying data and reporting processes.

Article 21c and remote access

Under article 21c of CRD VI, third-country based firms can no longer offer core banking services to EU customers from their non-EU entities (with some notable exceptions). This reflects a significant change in operating models, and firms will now need to establish a subsidiary with passporting rights across the EU, or a branch in each EU state they operate in. Banks will need to consider how this impacts their business models, operations and product lines.

Significant risk transfers

Significant risk transfers (SRTs) are under greater regulatory scrutiny as a tool to transfer risk and reduce capital requirements. The PRA has reiterated its expectations through the updated SS19/13, to ensure firms can demonstrate their effectiveness in ‘substance over form’. Banks need to consider the quality of underwriting, and actively manage concentrated exposures and correlation risks.

Digital assets

The FCA continues to roll out its crypto roadmap at pace, with all final rules and policy statements due by the end of 2026. This includes a new prudential regime, rules for trading platforms, custody rules, stablecoins, and a dedicated market abuse regime for cryptoassets (MARC), among others. Banks will face key challenges to ensure effective risk management and robust financial crime safeguards, while embracing new propositional opportunities, such as tokenisation.

Staying on track

Balancing these priorities will help banks maintain strength in the market and channel new opportunities for growth in 2026 and beyond. Read more on our top themes for banking and capital markets, or contact Supriya Manchanda, Kantilal Pithia or Chris Laverty for further information.