Since 2023, the Financial Conduct Authority (FCA) has had a secondary objective to facilitate the international competitiveness of the UK economy and its growth in the medium to long term. It is sometimes shortened to SICGO. Some chief executives may have read this as an invitation to expand faster with lighter oversight. That assumption is risky. The FCA must advance this objective alongside its primary objectives of consumer protection, market integrity and competition, and it has made clear that short-term growth for its own sake is not the aim.
For leaders of scaling financial services firms, the objective brings real opportunities, such as faster decisions and less administration. But those benefits are most likely to reach firms whose internal controls mature at the same pace as their balance sheet. Understanding how the FCA approaches sustainable growth is the first step towards expanding without friction.
What the Growth Objective Means in Practice
The FCA has said that growth should be sustainable, supported by market confidence, operational resilience and high regulatory standards. It has also taken visible steps to make life easier for firms. From January 2026, it has been working to fast-track authorisation targets, including four months for complete applications for new firms and variations of permission, down from six. Its 2026/27 work programme sets out plans to remove some regular data returns and to use AI, subject to testing, to help speed up decisions.
These timelines apply to complete applications, so a well-prepared submission matters more than ever. And when a firm scales rapidly, supervisory attention can still increase.
Supervisory friction arises when commercial momentum outstrips internal control frameworks. When customer acquisition accelerates, transaction volumes surge or new technologies are introduced, the FCA expects governance, compliance capacity and risk management to keep pace. In the FCA’s eyes, robust compliance is not a barrier to growth but the foundation that makes growth sustainable.
Where Scaling Firms Encounter Regulatory Friction
During periods of rapid expansion, firms often meet predictable pressure points that can draw supervisory scrutiny. This is most relevant to B2B financial businesses such as payments, e-money, investment and lending firms, although the detail varies by firm type.
- Governance and oversight gaps: Executive teams often grow sales, product and engineering headcount while leaving compliance and internal audit resourcing static. When board oversight and risk committees fail to keep pace with operational complexity, it can draw supervisory attention.
- Misalignment under the Senior Managers and Certification Regime (SM&CR): As organisational hierarchies grow, day-to-day responsibilities can shift informally without matching updates to Statements of Responsibilities (which apply to Senior Managers) and, for Enhanced scope firms, Management Responsibilities Maps. The first phase of SM&CR reforms, in force since April 2026, gives firms up to six months to notify changes to these documents. It does not change the expectation that accountability is clear and up to date inside the firm. The thresholds for Enhanced scope also rose by around 30% in July 2026, so fewer firms will be pulled into that regime by growth alone, but fast-growing firms should still check where they stand. Further reform is expected, so watch for the FCA’s phase two consultation.
- Strained systems and operational resilience: Rapid onboarding puts intense pressure on core technology, third-party suppliers and data management. Service interruptions, payment failures or data security incidents during growth phases can prompt closer scrutiny and, in some cases, formal inquiries.
- Demonstrating consumer outcomes at scale: Under the Consumer Duty, commercial expansion must be supported by evidence that customer outcomes remain fair as volumes grow. Automated distribution models and algorithmic decision-making tools need continual monitoring to prevent systemic consumer harm. This applies where your activities affect retail customers, so check how it applies to your business model. The FCA has also consulted on changes to the scope and proportionality of the Duty, so confirm the current position before relying on any single requirement.
- Liquidity, capital and safeguarding pressure: Expansion consumes working capital. If an aggressive growth programme draws down liquidity without updates to your internal capital and risk assessment, you risk breaching prudential thresholds. The relevant regime depends on your firm. Investment firms will look to the ICARA process, while payments and e-money firms must now meet the FCA’s strengthened safeguarding rules in CASS 15, which came into force on 7 May 2026 and tighten requirements around reconciliations, record-keeping and third-party due diligence.
Four Steps to Scale Without Friction
To make the most of market opportunities while keeping supervisory trust, you should build regulatory readiness into your operational strategy. We advise executive teams to follow four core steps.
Design Scalable Governance Ahead of Commercial Expansion
Do not wait for revenue milestones before formalising your governance. Set clear reporting lines, independent risk functions and robust board committees before entering new markets or launching new products. Make sure your non-executive directors have the technical capability to challenge commercial strategy effectively. The annual Consumer Duty board assessment is a good example of governance that needs to scale with your business. The FCA has proposed simplifying how firms report on it, so check the current requirements.
Treat Compliance Data as a Core Operational Asset
The FCA has said it wants to be a smarter, more data-driven regulator, and it uses the data firms report to spot emerging risks. Your leadership team needs the same visibility. Invest in management information that tracks conduct metrics, customer complaints, operational uptime and financial crime indicators in real time. For payments and e-money firms, that includes the new safeguarding reporting. Reliable data is your best defence in any supervisory review.
Maintain Proactive, Transparent Regulatory Dialogue
The secondary objective does not change what the FCA expects from firms, and openness remains essential under Principle 11. If you are planning a significant change to your business model, deploying complex automation or making a substantial acquisition, tell your supervisory team early.
Some changes need formal action, not just early notice. Matters with serious regulatory impact must be notified under Principle 11 and SUP 15. Acquisitions or increases in control need prior approval under the change in control regime in Part 12 of FSMA, where the FCA has up to 60 working days to assess a complete notification. New regulated activities may need a variation of permission. Approaching the FCA with a well-reasoned risk mitigation plan can help avoid unexpected supervisory intervention later.
Embed Accountability Across Senior Leadership
Every decision to accelerate customer acquisition or enter new markets carries regulatory implications. Make sure your senior managers understand how their individual statutory duties intersect with commercial targets. Clear personal accountability helps keep regulatory standards intact during fast-paced commercial delivery.
How ALPH Legal Supports You
Scaling a regulated business means balancing commercial momentum with sound legal and regulatory advice. At ALPH Legal, we partner with chief executives, boards and general counsel to reduce regulatory friction at every stage of growth:
- Growth readiness reviews: We assess your governance, risk management and compliance arrangements against regulatory expectations for high-growth firms, identifying weaknesses early.
- Governance structuring and SM&CR alignment: We design scalable management frameworks, draft clear Statements of Responsibilities and make sure accountability structures reflect how your business really runs as it expands.
- Proactive supervisory engagement: We draft clear regulatory submissions and help you explain new business models, product launches or cross-border expansion in the context of the FCA’s growth and competitiveness objective.
- Operational resilience and Consumer Duty support: We help you put in place practical testing and monitoring that evidence good customer outcomes and test the security of your supplier networks.
- Corporate structuring and expansion advice: When you are raising institutional capital, making acquisitions or expanding internationally, we manage the regulatory approvals process to help keep your transactions on track.
Sustainable growth in financial services depends on regulatory alignment, not regulatory avoidance. By building controls that scale alongside commercial success, your firm can seize market opportunities while keeping a strong working relationship with its supervisors. If your business is preparing for its next phase of growth, get in touch with our regulatory team, and we will help you plan with confidence.