TheCityUK Plots International Glory in Financial Centre Leadership Race

Industry-led body TheCityUK warns about complacency and the clever competition in a post-Brexit environment.

Industry-led body TheCityUK wants the UK to be somebody with a new international strategy for the nation to regain its financial centre leadership in the next five years.

TheCityUK represents UK-based financial and related professional services and reckons the country’s status as a “world leading financial centre” is at risk unless industry, government and regulators work together to boost long term competitiveness, deepen key trade links, and focus on new key areas of future global growth.

While the strategy is not just about B2B tech companies, it is arguably relevant to their future prosperity.

Miles Celic, Chief Executive Officer, TheCityUK, says: “The UK’s financial and related professional services industry is a strategic national asset which provides millions of high-value jobs right across the country, attracts inward investment, contributes significant tax revenue and generates large export surpluses.”

He adds: “One of the greatest risks for any successful financial centre is complacency. Europe is littered with cities that were once the leading international centre of their day. The last decade has been one of growth for our industry, yet global competitors have grown faster. However, with the right strategy in place and a clear focus on delivery, the UK can pull away once again from its competitors. It is an ambition that needs industry, government, and regulators to work together. It will take sustained focus, cooperation and determination.”

While it’s not quite anarchy in the UK just yet, TheCityUK points out the “highly impressive growth” of new financial centres in Asia and the “ongoing progress” made by the US. This has resulted in the UK losing ground in global market share in some areas of financial and related professional services.

TheCityUK notes that financial and related professional services is an industry that contributes over 10% of the UK’s total economic output, is the largest tax payer and employs one in 14 people across the country – two thirds of whom are based outside London. It is also the biggest exporting industry, generating a trade surplus equivalent to all other net exporting industries combined.

TheCityUK’s Plan 

With this industry being so important, and to address this challenge, TheCityUK’s plan underlines the need to strengthen market share in existing areas of advantage, such as fintech. It also calls for the UK to build its capabilities in future areas of global growth where the UK has a “strong competitive advantage,” such as data and technology, global ESG markets, international investment opportunities and risk management.

If this strategy pays off, the benefits include the creation of more “high-skilled, high-value jobs”; more foreign direct investment into businesses in all sectors; and position the UK as a leader in financing the growth of the green economy.

At present, the UK has 2.3 million of these “high-skilled, high-value jobs”, and had £35.5 billion in financial services (FS) foreign direct investment between 2016-2019.

In terms of specifics, TheCityUK’s strategy expresses the desire for the nation to become a global hub for data and technology by championing common ground rules for digital trade and seek targeted data transfer agreements.

In addition, it wants to partner with other countries to create global ESG disclosure standards and more interoperability of ESG taxonomies. TheCityUK also outlines the need for cheaper and quicker visas; a gateway for global investors; strengthening capital markets by adopting the recommendations of Lord Hill’s review; and boosting foreign direct investment by amending the tax regime for the financial services sector.

The 38-page strategy from TheCityUK can be found here.

The Kalifa Review of Fintech

This is not the first time someone in the UK has expressed concerns over the nation losing its preeminence in FS.

At Budget 2020, the Chancellor asked Ron Kalifa, the chairman of Network International (and formerly at Worldpay), to conduct an independent review to identify priority areas to support the UK’s fintech sector. The review formally launched in July 2020 and the details were published in February 2021.

Some ideas in the 108-page report included a fintech growth fund; a new retraining programme; expanding R&D tax credits, enterprise investment scheme and venture capital trusts; and boosting the growth of the top 10 fintech clusters.

The UK will have its work cut out in a post-Brexit world. Earlier this year, the US-based Nasdaq index attracted 40% of new fintech listings compared to 5% for the UK. London was also overtaken by Amsterdam as Europe’s biggest centre for trading European company shares.

Antony Peyton
Antony Peyton
Antony Peyton is the Editor of eWeek UK. He has 18 years' journalism and writing experience. His career has taken him to China, Japan and the UK - covering tech, fintech and business. Follow on Twitter @TonyFintech.
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