London continues to hold the top spot for financial and professional services, when compared to other global destinations, including New York, Singapore, Hong Kong and Frankfurt according to a new report published this week.
The benchmarking research by the City of London Corporation entitled “Our global offer to business: London and the UK’s competitive strengths in a changing world”, takes 91 different metrics into account. It clearly demonstrates that, while other major centres may lead on some measures, London and the UK have the strongest overall competitive offering.
London also continues consistently to perform strongly across all key dimensions, including innovation, reach of financial activity, resilience and business infrastructure, talent and skills, and regulation.
London received an overall competitiveness score of 62, followed by New York (54) and Singapore (53). The rankings were rounded out with Frankfurt (41), Hong Kong (40) and Tokyo (32).
This is despite Brexit uncertainty as the trade deal secured on Christmas Eve does not include financial or professional services. These sectors are still waiting on more clarity on the future trading relationship with Europe.
Key areas where London and the UK excel on a global stage include:
- London is the world’s capital for tech and innovation in financial services and is home to most of the Fintech 100 firms.
- Of the major economies, the UK’s regulatory and legal framework is leading as it sets international standards and is at the forefront of innovation.
- London and the UK are Europe’s leading destination for investment in financial services. In 2019, the UK’s net financial services exports were higher than the value of Singapore, Hong Kong, and Germany’s combined.
- After the US, the UK has the second-most international financial activity and is the world’s largest centre for international debt issuance, commercial (re)insurance, and foreign exchange trading.
- London is the only global financial centre that is also a leading centre for sustainable finance. Of all global financial centres, London is home to the ‘greenest’ stock exchange and offers the most future-ready talent pool on sustainability issues.
- The UK is home to the world’s best universities and MBA programmes. This, combined with a high share of relevant graduates, provide businesses in the UK with a world-leading pool of entry-level talent.
The report also identifies areas to improve and suggestions for development for the UK’s financial centre, including:
- London and the UK are behind the US’ total number of listed foreign companies and Hong Kong for its increasing number of foreign IPOs.
- Increased focus should go in reinforcing businesses’ confidence that the UK is a market worth investing in – the UK government needs to return to being perceived as more predictable, stable, and strategic.
- London and the UK have the slowest broadband speeds of all global financial centres. To remain competitive, further investment into the UK’s digital and transport infrastructure is needed.
- The UK needs to close skill gaps in London and across the country, particularly in the digital sector.
- With just 20% of financial services executive committee positions held by women, the UK lags behind its global comparators. Achieving gender parity would help businesses tap unused customer potential.
Policy Chair at the City of London Corporation, Catherine McGuinness, said:
“These findings clearly demonstrate that for all the challenges it faces the UK continues to lead the world when it comes to financial and professional services. But now is not the time to rest on our laurels.
“The competitive strengths of London and the UK should mean that we are well placed to seize opportunities as we start a new trading chapter outside the European Union. In order to do so, however, we need invest in infrastructure and skills across the country. We also need to ensure our regulatory framework keeps pace with technological change and innovation.
“The UK must also show global leadership as we take over the G7 presidency and prepare for the COP26 climate conference in Glasgow. Our financial and professional services sector has a vital role to play in tackling climate change and driving the recovery from the COVID-19 pandemic.”