The Prudential Regulation Authority at the Bank of England announced plans to consult this summer on reforms to the rules governing shared operational services for ring-fenced banks. The proposals would allow large banking groups more flexibility in how ring-fenced and non-ring-fenced entities share functions such as data processing, information technology and back office services, with the aim of streamlining requirements and reducing compliance costs while preserving protections for retail deposits. The ring-fencing regime applies to banks with more than GBP 35 billion of core deposits that also carry out material investment banking activity, requiring core retail banking to be separated from investment banking. The PRA said reforms in this area are possible because its prudential and resolution toolkit has developed since ring-fencing was introduced in 2019, particularly through the UK bank resolution regime. The planned consultation forms part of HM Treasury’s wider package of reforms to the UK ring-fencing regime, developed in coordination with the Bank of England and the PRA.
Bank of England2026-05-18
Bank of England to consult on more flexible shared services rules for ring-fenced banks
The Prudential Regulation Authority at the Bank of England will consult on reforms to rules governing shared operational services for ring-fenced banks, aiming to give large banking groups more flexibility in sharing functions such as data processing, information technology and back-office services while maintaining protections for retail deposits. The PRA said the reforms are enabled by developments in its prudential and resolution toolkit since ring-fencing was introduced and form part of HM Treasury’s wider package of changes to the UK ring-fencing regime.