In January 2026, the UK Treasury Committee published a detailed report on the use of artificial intelligence in financial services. Its conclusion is blunt: AI is spreading fast across the sector, but regulators are not keeping pace with the risks it brings.

Around three-quarters of UK financial services firms now use some form of AI. Banks, insurers, and payment providers rely on it for fraud detection, credit decisions, customer support, and operational efficiency. The government sees this as a growth engine and actively promotes adoption. The problem is not ambition. The problem is governance.

The Committee’s inquiry found that regulators are taking a “wait and see” approach. There is no AI-specific financial regulation in the UK. Instead, the Financial Conduct Authority and the Bank of England rely on existing frameworks. Both believe those tools are sufficient. Parliament does not agree.

What AI Changes for Consumers

The report highlights four concrete risks for consumers.

First, AI-driven credit and insurance decisions are often opaque. People are declined without clear explanations. Second, automated product tailoring risks deepening financial exclusion, especially for vulnerable groups. Third, consumers increasingly receive unregulated financial guidance from AI tools and search engines, which may be misleading. Fourth, AI lowers the cost of fraud at scale, raising the volume and sophistication of scams.

Regulators monitor complaints, social media, and firm behaviour. They have also launched controlled testing environments, such as the FCA’s AI Live Testing service and its Supercharged Sandbox. These are constructive steps. Yet they reach only a small number of firms and remain voluntary.

Industry feedback to the Committee is consistent: firms lack practical clarity on how existing rules apply to AI. Responsibility is especially unclear under the Senior Managers and Certification Regime. Leaders are personally accountable for harm, but AI systems are hard to explain, audit, and predict. The result is hesitation. Some firms slow down adoption. Others move forward without confidence that they are compliant.

Financial Stability Is the Quiet Risk

Beyond consumers, the report focuses on systemic risk.

AI increases cyber exposure. It concentrates operational dependencies on a small group of US-based cloud and AI providers. It may also amplify herding behaviour in markets, where models trained on similar data respond in the same way at the same time.

The Bank of England already runs cyber and operational stress tests. What it does not run are AI-specific scenarios. Members of the Financial Policy Committee told the inquiry that such testing would be valuable. The Committee agrees and formally recommends it.

There is also a legal framework designed to manage concentration risk: the Critical Third Parties Regime. It gives regulators oversight powers over firms that provide essential infrastructure to the financial system, including cloud and AI providers. The framework exists. The rules are written. Yet, more than a year after its creation, no company has been designated under it.

This gap became tangible in October 2025, when an Amazon Web Services outage disrupted major UK banks. Parliament asked why no major provider had yet been brought into the regime. The Treasury’s answer was procedural and non-committal.

The Committee’s message is simple: the tools exist. They are not being used.

Key takeaways for fintech startups

For founders and leadership teams, the report offers a few clear signals about where the environment is heading:

• AI adoption in financial services is now mainstream, not experimental.
  
  
• Regulators expect firms to manage AI risks within existing frameworks, even when guidance is unclear.
  
  
• Accountability for AI outcomes sits with senior management.
  
  
• Consumer harm from opaque or biased models is a priority concern.
  
  
• Systemic risk from shared infrastructure and automated behaviour is rising.
  
  
• More explicit rules and stress testing are likely within the next 12 to 24 months.

The direction of travel is toward tighter scrutiny, not deregulation. Startups that treat AI as a pure product feature will struggle. Those that treat it as a regulated capability will be better positioned.

If you are building or scaling a fintech product that relies on AI, now is the time to pressure-test your assumptions around explainability, accountability, and resilience. If you want help making that real, contact us. We work with founders who want to grow without creating risk they cannot control.

Polygon Labs announced in January 2026 that it has agreed to acquire two U.S. crypto firms, Coinme and Sequence, for more than $250 million in combined deals. The goal is to broaden its regulated stablecoin payments capabilities in the United States while building what it calls the Polygon Open Money Stack.

This move marks a clear shift in how blockchain infrastructure companies are thinking about regulated money movement and real-world payments. Polygon is no longer positioning itself only as a scaling layer for web3. It is stepping into the regulated payments arena.

The Acquisitions Explained

The first part of the transaction is Coinme. Founded in 2014, Coinme is one of the earliest licensed digital currency exchanges in the United States. It operates money transmitter licenses covering 48 states, provides enterprise API and SDK services through white-label crypto-as-a-service, and maintains a network of more than 50,000 physical retail locations where users can convert cash to crypto and back.

Coinme also runs licensed wallet infrastructure and serves over one million users through its payment applications. For Polygon, this means immediate access to regulated fiat rails and an operational footprint that would normally take years to build.

Sequence, the second company in the deal, brings advanced wallet infrastructure and cross-chain tooling. It offers smart wallets and a system for one-click cross-chain transactions. The aim is to let users move value across multiple blockchains without managing bridges, swaps, or gas fees themselves.

Together, these acquisitions deliver three building blocks for Polygon’s upcoming platform: regulated on- and off-ramps, wallet infrastructure, and cross-chain orchestration.

What This Means for Payments Infrastructure

Stablecoins have grown into serious settlement instruments, especially for cross-border transfers and on-chain commerce. Yet the layer that connects fiat money, regulation, and blockchain rails remains fragmented. Companies often stitch together multiple providers, each with its own constraints and compliance burden.

By bringing licensed fiat rails and wallet infrastructure into its own ecosystem, Polygon can offer developers and businesses a more unified payments stack. That has practical implications.

Fintechs can embed compliant payment flows without assembling half a dozen vendors. Stablecoin settlement becomes easier to connect to traditional banking systems. Product teams can focus on user experience instead of regulatory plumbing.

This is less about crypto speculation and more about operational finance.

The Strategy Behind the Move

Polygon’s leadership has framed this as an evolution into a regulated payments entity in the U.S. market. The initial focus is business-to-business payments, with room to expand later.

Rather than competing head-on with existing card networks or banks, the strategy leans toward partnership. The goal is to make stablecoin rails usable inside real financial workflows, not just inside web3-native products.

The Open Money Stack is meant to combine regulated components with on-chain settlement in a single platform. It is positioned for banks, enterprises, fintechs, remittance providers, and merchants that want to experiment with or adopt stablecoin payments without rebuilding their entire infrastructure.

Key takeaways for fintech startups

These developments highlight several patterns that are becoming hard to ignore:

• Real-world payments still depend on regulated fiat access and compliance, even when settlement happens on-chain.
  
  
• Regulatory coverage can be a strategic moat, not just a cost center.
  
  
• Integrated stacks reduce complexity for both builders and end users.
  
  
• B2B adoption often opens the door for broader market reach later.
  
  
• Stablecoins are increasingly treated as infrastructure, not experiments.

Where this leaves builders

For fintech teams, this signals a shift from fragmented crypto tooling toward more enterprise-grade, regulated platforms. The building blocks for compliant stablecoin payments are becoming more accessible, but they still require careful product and regulatory design.

If you are exploring how stablecoins, blockchain rails, or new payment flows fit into your roadmap, this is a good moment to step back and think structurally.

If you want an outside perspective on how these shifts affect your product or strategy, contact us or reach out. We help fintech teams turn complex infrastructure changes into clear, workable plans.

On 19 January 2026, Revolut announced that it has applied for a full banking licence in Peru. The company also confirmed the appointment of Julien Labrot as CEO of Revolut Peru. Together, these two steps mark the start of a serious, long-term entry into the Peruvian market.

This is not a soft launch or a marketing test. Applying for a full licence means Revolut is preparing to operate as a locally regulated bank, under the same rules as domestic institutions. It is a structural move that requires time, capital, and deep regulatory engagement.

For a company that started as a travel card in the UK, this is another sign of how far its ambitions now reach.

What a Full Banking Licence Really Means

A full banking licence allows a company to offer the same core services as traditional banks. That includes holding deposits, providing local accounts, and eventually offering credit and other regulated products.

This is very different from operating under an e-money framework or serving customers cross-border. It places Revolut inside the local financial system, with all the obligations that come with it. Capital requirements, consumer protection, risk controls, reporting duties. None of this is lightweight.

The application process itself can take months or longer. Regulators review governance, financial resilience, compliance structures, and long-term viability. Until approval is granted, Revolut cannot operate as a bank in Peru.

The message, however, is already clear. Revolut is not experimenting. It is committing.

Why Peru Fits Revolut’s Strategy

Peru sits within a broader Latin American expansion that also includes markets such as Brazil, Mexico, Colombia, and Argentina. The region combines growing digital adoption with large segments of the population that remain underserved by traditional banking.

In Peru, mobile usage is widespread, yet many people still rely on cash or limited financial products. That creates space for digital-first players that offer simple onboarding, transparent pricing, and modern app-based experiences.

For Revolut, the appeal is not only scale. It is also relevance. Features like multi-currency accounts, low-cost transfers, and financial management tools resonate in economies with cross-border ties, remittances, and price sensitivity.

At the same time, this is not a greenfield market. Local banks and regional fintechs are already active. Any new entrant has to earn trust, adapt to local habits, and compete on more than just branding.

Building Locally, Not Just Globally

The appointment of Julien Labrot as CEO of Revolut Peru reflects an important pattern. Global fintechs increasingly rely on strong local leadership when entering new markets.

Running a regulated financial institution is as much about relationships and context as it is about technology. Local CEOs navigate regulatory dialogue, shape hiring, and translate global products into something that fits domestic realities.

This approach reduces friction. It also signals seriousness to regulators and partners. A named leader with regional experience is easier to engage with than a distant headquarters.

Expansion at this level is not only about shipping an app in a new language. It is about building an institution that works within local rules and expectations.

What Comes Next

The licence application is the starting point. Approval will take time, and no public launch date has been announced. Once approved, Revolut will be able to roll out banking services in Peruvian soles, alongside its existing international features.

Execution will matter more than intent. The market already has established players. Customer acquisition will depend on product relevance, trust, and operational reliability.

Peru may become a blueprint for further moves in the region. Or it may reveal how difficult local banking truly is when you leave your home regulatory environment.

Either way, this is a meaningful chapter in Revolut’s evolution from European fintech to global bank.

Key takeaways for fintech startups

Before expanding into new markets, it helps to understand what moves like this actually involve.

• Revolut has applied for a full banking licence in Peru.
  
  
• The move is part of a wider expansion across Latin America.
  
  
• A full licence enables the offering of regulated, local banking services.
  
  
• Peru combines strong digital adoption with a large underserved population.
  
  
• Local leadership is central to managing regulation and market fit.

If you are thinking about international growth or regulatory expansion, these moves are worth studying. If you want to explore what this means for your own roadmap, feel free to contact us or reach out to the Your Fintech Story team.