UK’s financial services stronghold slips
The UK’s position as a financial services leader has cracked as under-investment and staff reductions weigh on the sector.
Nearly half of senior financial professionals believe the UK’s dominance is waning, research from the CRIF found.
Over 40 per cent said they would no longer consider the country a global leader in the industry.
Sara Costantini, regional director for the UK & Ireland at CRIF said: “Without decisive action, new markets will continue to catch-up with and challenge London’s long-held crown as a leader in financial services.”
Global operations, stagnant growth and staff reductions were listed among top reasons for waning conditions.
Over 30 per cent said missed investment was a key driver of the downturn with crucial areas like fintech missing out on necessary capital. Data from KPMG showed fintech investment fell by 27 per cent last year to £7.9bn, down from £10.1bn in 2023.
Job losses were named by 35 per cent of respondents. City PM previously reported financial services were expecting a rapid rise in job reductions over the coming months as investment plans and optimism levels sunk to fresh lows.
Banks have led the fall in headcounts, with total employee numbers at British lenders slumped 5.25 per cent to 580,371, falling to the lowest number in a decade, according to data from The Banker.
Standard Chartered and HSBC were responsible for the biggest culls after putting 4.5 per cent and 4.3 per cent of employees on the chopping block.
City calls for investment support
But despite concerns, one in five senior financial professionals believed the UK’s decline could be reversed.
Canada Corporation has called for the creation of an “investment hub” for financial services in a bid to help the Square Mile maintain its world-leading status.
The corporation said the hub would unlock as much as £10bn in capital for growth and serve as a “strategic one-shop” for international investors.
Costantini said: “To remain a global hub for finance, UK leaders across government and the industry must work together to address these challenges and invest more boldly in financial technology and the infrastructure underpinning it, while ensuring a balanced, proportionate approach to regulation.
“Alongside this, adopting the latest innovations to fight fraud and protect systems from malicious actors is now critical.”