PRA outlines October regulatory updates for UK financial services

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PRA October 2026 UK updates

Highlights

PRA's October 2026 Regulatory Digest covers consultation on automatic thresholds indexation and phase two of the Senior Managers and Certification Regime review.
Policy Statement PS19/26 removes the firm-specific 15% cap on high loan to income lending, allowing lenders greater strategy flexibility while maintaining overall sector controls.
The Bank of England and FCA joint publication shares findings from their fourth survey on AI and machine learning use, signalling increased regulatory focus on technology governance.

October digest highlights policy and supervision agenda

As reported by Bank of England, citing the Prudential Regulation Authority, the October 2026 Regulatory Digest compiles key regulatory developments for firms operating in UK financial services, including consultation papers on automatic thresholds indexation and the second phase of the Senior Managers and Certification Regime review.

The digest also highlights PS19/26 on high loan to income lending, alongside a joint Bank of England and Financial Conduct Authority publication on artificial intelligence and machine learning in financial services. Together, the updates show the PRA's current focus on governance, lending standards and the operational use of emerging technology.

Within the SM&CR review, the regulator says the proposed reforms are intended to create a more flexible, proportionate and streamlined regime while keeping a clear focus on individual accountability for senior decision makers in regulated firms. The framework was introduced in 2016 and remains a core prudential tool shaped by lessons from the 2008 financial crisis.

Implications for lenders, managers and technology governance

The final policy on high loan to income lending removes the firm-specific 15% cap, giving lenders more flexibility to set strategies in line with their risk appetite and business models. The PRA says this approach still aims to keep aggregate lending aligned with the Financial Policy Committee's 15% limit.

The artificial intelligence publication adds a broader cross-cutting signal for the industry, as the Bank of England and the Financial Conduct Authority present results from their fourth survey of AI and machine learning use in UK financial services. The survey summary describes how firms are using or planning to use AI, how they govern and manage it, and how they assess the benefits, risks and constraints tied to deployment.

Our earlier article on banks’ “bare metal” recovery planning explained how UK supervisors are urging lenders to strengthen cyber resilience as AI increases the scale and complexity of potential attacks. We noted that regulators want firms to move beyond perimeter defences and build independent recovery options to keep critical services running even if core technology is compromised.

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