FCA cites Open Finance among next steps to support SME access to finance

Source: Financial Conduct Authority

An FCA review found no evidence that its regulation is a major barrier for SME access to finance. Many of the challenges identified relate to wider market, information and capability challenges.

The review found that the challenges are often greatest for microbusinesses, which make up 95.5% of all SMEs and are less likely to use external finance. Limited awareness of finance options, complex application processes, duplicated checks, and difficulties accessing products suited to businesses with limited collateral or largely intangible assets were all highlighted as issues.

As part of its commitment to supporting growth, the FCA is focusing its next steps in three areas to help reduce friction:

• Supporting a more proportionate regulatory regime through Consumer Credit Act reform.
• Helping unlock the benefits of Open Finance, including prioritising SME lending as a key use case.
• Monitoring industry work to explore whether digital verification could reduce duplication in customer checks, while maintaining effective financial crime controls.

Graeme Reynolds, FCA director of competition, said: “Small businesses need to be able to access the finance they need at the right time to start up, grow and invest. Our regulation is not a major obstacle – that does not mean the system works as well as it could.

“We’re focusing on where we can make a practical difference by reducing unnecessary friction, supporting a more proportionate regulatory framework and helping unlock the benefits of Open Finance.”

The review complements wider government and regulatory work to improve access to finance for smaller businesses. Where stakeholders identified issues that fall outside the FCA’s remit, such as on alternative lending, it has shared those findings with the relevant government departments and bodies best placed to address them.

The Financial Conduct Authority is an Event Partner of Open Banking Expo UK & Europe 2026 on 13-14 October at the Business Design Centre in London. Find out more and buy your ticket here.

Further reading: Financial Conduct Authority unveils UK’s Open Finance Roadmap to 2030