By Catherine Harlow — Regulation Editor
FCA Launches Financial Inclusion Sandbox Targeting Underbanked Communities Across the UK
The FCA has opened a dedicated financial inclusion regulatory sandbox, inviting fintechs to test products designed for underbanked and financially excluded populations. The initiative has attracted 42 applicants including credit unions, community lenders, and savings app developers.
The Financial Conduct Authority has launched a dedicated regulatory sandbox focused exclusively on financial inclusion, marking the first time the regulator has created a thematic sandbox targeting underserved populations. The initiative, announced in February 2026, invites fintech companies, credit unions, and community finance organisations to test innovative products designed to serve the estimated 1.3 million adults in the UK who remain unbanked and the further 8.5 million classified as financially underserved by the FCA's own Financial Lives Survey.
The sandbox has attracted 42 applications in its first cohort, spanning a range of solutions from AI-powered affordability assessments to savings apps that use behavioural nudges to help low-income households build financial resilience. Among the participants are several notable fintechs, including Creditspring, which offers interest-free credit to consumers locked out of mainstream lending, and Plum, which is testing a micro-savings feature specifically designed for recipients of Universal Credit. "Financial exclusion is not just a social issue, it is an economic drag," said FCA director of innovation Jessica Sheridan. "Every person shut out of the financial system represents unrealised potential for both the individual and the broader economy."
The sandbox operates with modified regulatory requirements, allowing participants to test products with real consumers for up to 12 months under close FCA supervision. Successful participants will receive expedited authorisation to launch their products nationwide. The initiative has been welcomed by the financial inclusion charity Fair4All Finance, which contributed £3 million in grant funding to support sandbox participants that demonstrate the strongest social impact potential. "This is exactly the kind of regulatory innovation we need," said chief executive Sacha Sheridan-Sherwood. "The sandbox model has worked brilliantly for fintech innovation broadly; applying it specifically to inclusion challenges could be genuinely transformative for millions of people."
