Exclusive: FCA licence approvals slump
As few as six e-money licence applications have been granted by the UK’s financial regulator over the past 9 months, Morning Wire can reveal, underscoring the scale of the regulatory obstacles faced by Britain’s fintech startups.
Data obtained by Morning Wire via Freedom of Information request showed that not a single authorised electronic money institution (AEMI) licence was granted by the Financial Conduct Authority (FCA) in the fourth quarter of 2024, despite at least 10 applications being under consideration at the time.
The figure nudged up slightly to two applications granted in the first quarter of 2025, followed by another four applications in the second quarter. 35 applications were closed over the nine-month period, meaning just 16 per cent of total applications were approved.
Approval of AEMI status is essential for fintech firms, as it allows them to provide payments services and issue electronic money on behalf of customers.
The drop in the number of approvals, which represents a 45 per cent fall on the previous year, comes despite calls from the Chancellor for regulators to adopt a more pro-growth approach to ease the burden on startups seeking to scale, vowing to “slash red tape and reduce costs for business.”
Seb Wallace, co-founder of early-stage venture capital investor Triple Point, told Morning Wire: “The FCA remains a far cry from the growth-minded type of regulator the UK needs for startups today.
“While the FCA has been improving from the overall application speed lows of 2021-22, the approval process is a slow and expensive tax on startups. A year from application to approval is an eternity in the startup world.
“To add salt to the wound, in almost all situations, the FCA asks basic questions on topics covered in startup applications. They could cut down on pain by simply reading applications thoroughly before responding with questions.
“It feels like their process is deliberately designed to slow people down.”
Data from the FoI request took nearly two months to obtain after the FCA initially sent erroneous information to Morning Wire in July before apologising and sending a corrected dataset in September.