UK finance sector remains a global leader

The global strength of the UK's financial services and related professional services is illustrated by the latest annual report from the industry's lobby group, TheCityUK.

The sector trade surplus last year amounted to £79.9 billion with financial services accounting for £60.3 billion - almost as much as the combined total of the US and Switzerland, the next two leading net exporters globally. Green finance, Islamic finance and maritime financial services are cited in the report as areas where the UK has been at the forefront of development and innovation.Although the sector's immediate future across the EU remains uncertain because of Brexit, the report also says the UK’s strength in FinTech stems from a combination of the location of a world-leading financial centre with a strong, fast-growing technology sector.Looking at the first half of 2020, the nation's FinTech market generated revenue worth £6.6 billion and employed 76,500 people. The average amount of capital UK FinTechs received from investors stood at £20.1 million in 2019, up from £15 million two years earlier.Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “Metrics such as these are a testament to the UK’s global competitive advantage in financial services and underscore the industry’s status as a significant national asset. They also demonstrate the country’s role as the world’s most internationally-oriented, full-scale hub for such services.“The UK’s strength in this area stems not only from the high volume and value of transactions, but also the breadth of services and expertise available—the ‘ecosystem’ effect. This ranges from green finance to Islamic finance, and is supported by an extensive network of professional services related to financial services: legal, accounting and consulting.”According to the report, the US was the largest single destination for UK financial services exports, accounting for 30 per cent of last year's total. The 27 EU states accounted for 34 per cent with countries in Asia notching up 16 per cent.It meant that the UK was the largest global net exporter of financial services, ahead of the US, Switzerland and Singapore, and held the number one spot in several markets, including cross-border bank lending, interest rates OTC derivatives turnover (50 per cent global market share) international debt securities, and foreign exchange turnover (43 per cent global market share)."To put this into perspective," said TheCityUK in a statement, "around 2.5 times as many dollars are traded in the UK as in the US."The report also found:- The UK is one of the largest markets in the world for fund management, behind only the US. UK assets under management totalled a record £9.9 trillion in 2019 and the sector has a strong international orientation.- The UK insurance sector is the biggest in Europe and fourth largest in the world. UK insurance premiums represented around one quarter of premiums in advanced European economies and 5.8 per cent of global premiums.- The UK legal services sector is the largest in Europe and second largest globally. At £36.8 billion, UK legal services revenue accounted for five per cent of the global total in 2019.

Read more news and views from David Sapsted.

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