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UPDATE 1-After transition deal, Bank of England to update its Brexit approach next week

next week@ (Adds comments, background)

LONDON, March 23 (Reuters) - The Bank of England said it would update banks and insurers next week on its approach to Brexit given that Britain and the European Union have now adopted a transition deal.

"The Bank of England welcomes the EU Council's conclusion that there should be a transition period following the UK's withdrawal from the EU," a BoE spokesperson said on Friday.

"In light of the EU Councils conclusions, we will provide an update on our regulatory approach to preparations for EU withdrawal next week."

Banks and insurers operating in Britain are making changes to ensure they can still serve customers in the bloc after Brexit.

Financial firms from the EU operating in London are also waiting to see if they can continue as branches or have to convert into subsidiaries, an expensive undertaking.

EU leaders approved on Friday a "standstill" transition period to end 2020.

The financial sector wants regulators in Britain and the EU to say it means they don't have to rush to have new EU hubs in place by next March, or for branches of EU banks in Britain, have to convert into subsidiaries, an expensive undertaking.

"It will now be important to have clarity from regulators as to their expectations in light of the agreed transition period," Simon Lewis, chief executive of AFME, a European banking industry body. (Reporting by Huw Jones Editing by Andrew Heavens)