PRA’s 2025 supervisory priorities for banks in the UK
The Prudential Regulation Authority (PRA) has set out its supervisory priorities for 2025, outlining key areas of focus for both UK deposit takers and international banks operating in the UK. These priorities reinforce the need for strong governance, risk management, and operational resilience.
Key priorities for UK deposit takers:
The PRA’s 2025 supervisory priorities for UK deposit takers continue to emphasise the importance of risk management, governance, and data integrity.
Governance, risk management, and controls
Firms must strengthen governance and risk management frameworks to address growing challenges from geopolitical risks, interest rate volatility, and technological advancements, including AI. Boards are expected to play an active role in ensuring risk oversight, model risk management (MRM) enhancements, and strategic decision-making based on robust regulatory models.
Data risk and accuracy
The PRA has identified poor data quality as a recurring issue, impacting firms’ ability to manage risks effectively. Financial institutions must improve data aggregation, ensuring accuracy in regulatory reporting and decision-making. The increasing reliance on AI and analytics further underscores the need for high-quality data governance.
Liquidity and funding resilience
Liquidity resilience remains a top priority, with firms required to prepare for evolving market conditions and central bank policy changes, including the transition to a demand-driven reserves framework. Banks must also proactively manage the refinancing of Term Funding Scheme (TFSME) repayments, ensuring sufficient liquidity buffers.
Operational resilience and cyber risk
By March 2025, firms must demonstrate that they can maintain operations within impact tolerances during severe disruptions. The PRA expects firms to enhance their cybersecurity posture, improve oversight of third-party service providers, and ensure IT investments are resilient by design.
Key priorities for international banks
The PRA has outlined similar expectations for international banks operating in the UK, focusing on governance, risk management, and compliance with evolving regulatory frameworks.
Regulatory governance and risk oversight
The PRA is increasing scrutiny of risk management frameworks, ensuring firms have strong internal controls in place. Boards must actively engage in risk oversight, particularly regarding model risk management, credit risk, and counterparty exposure to non-bank financial institutions. Counterparty credit risk (CCR) management remains an area of focus, with many firms falling short of the standards needed for their businesses. Firms are expected to enhance their CCR frameworks, ensuring adequate risk assessment, capital allocation, and reporting.
Operational and data resilience
International firms must demonstrate robust data management practices, ensuring consistency in reporting and risk assessment across their global operations. The PRA is also closely monitoring firms’ ability to withstand operational disruptions, including IT and cyber threats.
Liquidity and capital requirements
Cross-border financial institutions must align their liquidity and capital planning with evolving UK requirements while managing exposure to global market fluctuations. The PRA has reiterated the need for comprehensive contingency planning to mitigate potential liquidity risks.
Why this matters
The PRA’s 2025 priorities reflect the growing regulatory focus on governance, risk oversight, and resilience. Financial institutions must take proactive steps to strengthen compliance, enhance data governance, and prepare for regulatory developments.
As regulatory expectations evolve, the quality and accuracy of data will be critical for effective risk management and decision-making. Firms must prioritise robust data aggregation to ensure transparency, consistency, and reliability in regulatory reporting.
Suade’s automation-first approach enables banks to meet these increasing demands with efficiency and accuracy. Our regulatory reporting platform enhances data integrity, streamlines compliance processes, and ensures firms have the accurate, high-quality data needed for effective risk oversight. By leveraging automation and advanced analytics, Suade helps financial institutions maintain resilience, improve reporting accuracy, and stay ahead of regulatory change.
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