Resilience and Proportionality: 2026 Supervision Priorities for UK Deposit Takers
Shakeel Aslam · Posted on: February 11th 2026 · read
Shakeel Aslam, Partner at MHA, the UK member firm of the global Baker Tilly accountancy and consulting network discusses the key points of the Bank of England/Prudential Regulation Authority supervision priorities for UK Deposit Takers in 2026:
For UK banks and building societies, the 2026 priorities focus on maintaining high levels of resilience to protect the economy from global financial market volatility.
Risk and Capital Management
NBFI and Private Capital: Major UK banks have approximately £120 billion in trading book exposures to NBFIs. The PRA expects boards to have an accurate view of these exposures, especially across private equity and private capital counterparties.
Significant Risk Transfers (SRT): Following updated standards on 1 January 2026, senior management must remain actively engaged in approving transactions that lead to capital reductions.
The Strong and Simple Framework: For Small Domestic Deposit Takers (SDDTs), this more proportionate capital regime is due for implementation on 1 January 2027. Firms must work through the implications for their capital positions throughout 2026.
Operational and Data Integrity
- Testing Tolerances Firms must be able to detect and recover critical services within their impact tolerances during disruptions. This includes maintaining contingency and stressed exit plans for third-party service failures.
- Data Governance Poor data quality is identified as a driver of operational and prudential issues. Major firms are expected to progress multi-year modernisations of their data architecture.
Growth and Competition
Supervisory Transition: In 2026, the PRA will begin moving all firms remaining on an annual review cycle to a two-year PSM cycle to reduce the regulatory burden.
Support for Mutuals: The PRA will work with the FCA to support the mutuals landscape to drive inclusive UK growth. It also aims to accelerate timelines for reviewing Senior Manager applications and internal ratings-based (IRB) model change applications.
