The UK’s financial services sector is renowned for its openness, innovation, and dynamism. It’s a key part of the UK economy, offering a wide range of opportunities and benefits for businesses, investors, and professionals.
Financial services
The UK is a global finance hub with a business-friendly environment, strong support from regulators and the government, excellent connectivity, and a pool of highly skilled international talent. The government’s focus is on keeping the UK open, competitive, at the forefront of technology and innovation, and a leader in green finance.
Opportunity highlights
Islamic Finance
The UK’s Sovereign Sukuk and Attractive Regulatory Environment
The UK has emerged as a preeminent Western hub for Islamic finance, solidifying its status as the top non-Muslim majority nation for Islamic finance. In 2021, the UK underscored its commitment to this sector by issuing its second sovereign Sukuk, an Islamic financial certificate, attracting investors worldwide. What makes the UK particularly appealing for Islamic finance is its highly favorable regulatory and tax environment. The government has taken significant steps to foster the growth of Islamic financial products, including the elimination of double taxation and an extension of tax relief on Islamic mortgages. Additionally, reforms have been implemented for the issuance of debt, providing a clear pathway for investors to engage with this rapidly expanding market.
Fintech
Pioneering the Global Fintech Industry
The UK boasts a commanding presence in the fintech sector, commanding a notable 11% of the global fintech industry. It’s home to an estimated 2,500 fintech firms, with six of the top ten fintech companies headquartered in London. The country is a vanguard of fintech innovation, leading the way in various subsectors such as payment technology (Paytech) and wealth technology (Wealthtech). The government, in collaboration with the industry, is dedicated to accelerating the growth of the UK fintech sector. A testament to this commitment is the FinTech Pledge, a groundbreaking initiative that establishes globally leading standards for efficient and transparent commercial partnerships between banks and fintech firms.
Environmental, Social, and Corporate Governance (ESG) and Green Finance
Leading in Sustainable Finance and ESG Investments
The UK is a frontrunner in the field of sustainable finance, with London securing the top rank in the Global Green Finance Index. The market for Environment, Social and Governance (ESG) investments in the UK has experienced remarkable growth. In 2020, the value of responsible investment (RI) funds under management nearly doubled to £55 billion, showcasing a surge in ESG-conscious investment practices. The London Stock Exchange is a prominent platform, housing 260 sustainability-related bonds from 23 countries, over 180 ESG Indexes, and over 150 Green Funds and Exchange Traded Funds (ETFs). Additionally, the UK is set to become the first country in the world to make Task Force on Climate-Related Financial Disclosure (TCFD)-aligned disclosures mandatory across the economy from April 2022. This bold step is aimed at enhancing transparency and understanding of financial impacts related to climate change, contributing to a more accurate pricing of climate-related risks.
Capital Markets
The London Stock Exchange and Asset Management Hub
The London Stock Exchange stands as one of the world’s most international capital markets, attracting both international firms and investors. This global financial hub accounts for a staggering 43% of global foreign exchange trading and reigns as the primary center for international bond trading, facilitating around 79% of global secondary market turnover. Over the period from 2014 to 2018, UK companies raised an impressive £750 billion in the bond, equity, and leveraged loan market—almost half of the total amount that banks lent to all UK companies during the same period. The UK also secures its position as the world’s largest asset management center outside the US, managing a staggering £8.5 trillion in assets. London stands as a vital destination for global asset managers seeking to attract international investors to their offerings, encompassing all major asset classes, including equities, fixed income, property, and various alternative investments.
Commercial maturity
Leading in Financial Services
The UK’s Dominance in Global Financial Services
The United Kingdom stands as a pivotal and innovative financial services hub on the global stage. With distinctions such as the world’s largest centre for international debt issuance, a stronghold in commercial (re)insurance, and a hub for foreign exchange trading, the UK has made remarkable strides in shaping the financial services industry. Notably, it takes the lead as the world’s foremost net exporter of financial services, boasting an impressive industry trade surplus of £63.7 billion in 2020.
A Vision for the Future
A New Chapter in Financial Services
A new chapter is being written for the UK’s financial services industry, reflecting the government’s vision for an open, green, and technologically advanced financial sector that is positioned to compete effectively on the global stage. This vision aligns with a commitment to fostering an environment where innovation, sustainability, and competitiveness converge to shape the future of financial services in the UK and beyond.
UK assets
A Convenient Time Zone
The UK’s Business-Friendly Time Zone
The UK’s time zone provides a strategic advantage for global business operations. Situated between major markets to the east and west, the UK offers a unique positioning that allows businesses to seamlessly engage with international partners within the working day, enhancing efficiency and productivity.
A Diverse Workforce
Employment in Financial and Professional Services
The UK boasts a diverse and skilled workforce in the financial and related professional services sector. Approximately one in every 14 workers in the UK, totaling 2.3 million individuals, are employed in this sector. Notably, two-thirds of these jobs are located outside of London, demonstrating the sector’s national presence and contribution.
Thriving Financial Centers
Key Financial Centers Across the UK
Financial services in the UK extend beyond London, with several thriving financial centers distributed across the nation. These centers include Edinburgh and Glasgow in Scotland, Birmingham, Bristol, Leeds, Liverpool, Manchester, and Sheffield in England, Cardiff in Wales, and Belfast in Northern Ireland. These regional hubs play vital roles in the nation’s financial landscape.
Leveraging Technology
Technology Advancements in Financial Services
The UK’s financial sector leverages its strong technology ecosystem, marked by expertise in areas like artificial intelligence (AI) and cybersecurity. This tech-driven approach has powered a successful digital transformation of financial services operations, enabling businesses to remain competitive in an ever-evolving market.
Global Collaborations
FinTech Bridge Agreements
The UK fosters global collaborations through FinTech Bridge agreements with key fintech hubs, including Singapore, South Korea, China, Hong Kong, and Australia. These agreements serve to reduce barriers to entry to international markets, creating valuable opportunities for expansion and collaboration.
Championing Green Finance
The Green Finance Institute
The Green Finance Institute champions the UK’s green finance brand on the international stage. By bringing together global practitioners, it designs sector-specific solutions that effectively channel funds toward an environmentally sustainable economy, contributing to the global effort to combat climate change and promote sustainability.
R&D capability
World-Class MBA Programs
Exceptional MBA Programs in the UK
The UK boasts some of the world’s top MBA programs, offering high-quality education to aspiring business professionals. In 2021, nine UK MBA programs were ranked among the top 100 full-time MBA programs globally by the Financial Times Global MBA, underscoring the excellence of British business education.
Abundant Talent Pool
Access to Highly Qualified Talent
The UK’s financial and professional services firms have access to a vast and highly qualified talent pool. Each year, a substantial number of graduates join the workforce, contributing to the growth of these sectors. In the 2018-2019 academic year, 184,155 students graduated in fields such as business, finance, accounting, computer sciences, and mathematical sciences, ensuring a steady supply of skilled professionals.
Talent for the Future
Financial Services Skills Commission
The Financial Services Skills Commission is dedicated to working closely with the UK financial services sector. Its primary objective is to ensure that the industry has access to the talent and skills necessary for its future development. Through collaboration and strategic initiatives, it strives to address the evolving needs of the sector, ensuring its workforce remains well-equipped and highly skilled.
Business and government support
Supportive Regulatory Environment
The UK’s financial services sector benefits from a regulatory regime that fosters innovation and competition. Key entities in this ecosystem are the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), which collaborate to create an environment conducive to business growth and innovation.
Key Initiatives
Several key initiatives have been introduced to bolster innovation and competitiveness, including:
- FCA’s Regulatory Sandbox: The Financial Conduct Authority’s Regulatory Sandbox offers a safe space for innovative financial firms to test their products, services, and business models without the usual regulatory constraints, promoting innovation and experimentation within the sector.
- Global Financial Innovation Network (GFIN): The Global Financial Innovation Network is a collaborative network of financial regulators from around the world. It promotes global financial innovation by facilitating dialogue, sharing expertise, and collaborating on innovative solutions to common challenges.
- Open Banking Framework: The Open Banking framework enables consumers to securely share their financial data with authorized third parties, fostering competition and driving innovation within the banking sector.
Financial Services Act 2021
The UK’s Financial Services Act 2021 is a significant piece of legislation that plays a crucial role in shaping the regulatory framework of the country’s financial services sector post-Brexit. It represents a milestone in ensuring the sector’s sound and competitive development.
City of London Corporation
The City of London Corporation is dedicated to enhancing the UK’s competitiveness as the leading global hub for financial services. Through initiatives like “The Global City,” it showcases the UK’s offerings, making a case for London as a global financial powerhouse.
Other Sectors
Explore diverse sectors across the UK where you can invest and enhance your business or ideas.
Fintech
The UK is a global fintech hub, with extensive financial services experience, technological talent and progressive regulation.
Food and drink
Combining high-quality produce with cutting-edge technology, the UK is at the forefront of innovation in the food and drink industry.
Green Shipping
Building on a rich maritime history, the UK is pioneering environmentally friendly shipping and the adoption of green technologies across the industry.