The UK has one of the most open, innovative and dynamic financial services sectors in the world.
The UK is a global centre for finance. Companies can benefit from an exceptional business environment, regulatory and government support, physical and digital connectivity and highly skilled international talent. The government is aiming to make the UK open and competitive, at the cutting-edge of technology and innovation, and a world leader in green finance.
The UK is the leading Western centre for Islamic Finance, ranking first among non-Muslim majority nations for Islamic finance. The UK has bolstered its position in this sector by issuing its second sovereign Sukuk in 2021. Investors can take advantage of one of the world’s most attractive regulatory and tax environments for Islamic finance.
The UK has put in place a fiscal and regulatory framework intended to broaden the market for Islamic financial products. This includes the removal of double tax and extension of tax relief on Islamic mortgages and the reform of arrangements for issues of debt.
The UK accounts for 11% of the global fintech industry. It is home to an estimated 2,500 fintech firms, with 6 of the top 10 fintech companies headquartered in London. It’s at the cutting-edge of fintech innovation taking the lead in areas such as payment technology (Paytech), wealth technology (Wealthtech) and more.
The FinTech Pledge demonstrates government and industry commitment to accelerating the growth of the UK fintech sector. It establishes globally leading standards for efficient and transparent commercial partnerships between banks and fintech firms.
Environmental, Social, and Corporate Governance (ESG) and Green Finance
The UK is a leading centre for sustainable finance with London, ranking first in the Global Green Finance Index. The market for Environment, Social and Governance (ESG) investments in the UK has grown dramatically.
In 2020, the value of responsible investment (RI) funds under management almost doubled to £55 billion from the previous year. On the London Stock Exchange, there are 260 sustainability-related bonds from 23 countries, over 180 ESG Indexes and over 150 Green Funds and Exchange Traded Funds (ETFs).
The UK will become the first country in the world to make Task Force on Climate-Related Financial Disclosure (TFCD) - aligned disclosures mandatory across the economy from April 2022. The new requirements will help investors and businesses to better understand the financial impacts of their exposure to climate change, and price climate-related risks more accurately.
The London Stock Exchange is one of the world’s most international capital markets and the destination of choice for both international firms and international investors. It accounts for 43% of global foreign exchange trading and is the leading centre for international bond trading with around 79% of global secondary market turnover.
Between 2014 to 2018, UK companies raised £750 billion in the bond, equity and leveraged loan market – almost half the total amount banks lent to all UK companies over the same period.
The UK is also the world’s largest asset management centre outside the US with £8.5 trillion of assets under management. London is also an important destination for global asset managers seeking to attract international investors to their own products and services. These span all the main asset classes, including equities, fixed income and property, as well as a wide range of alternative investments.
The UK is an important and innovative financial services hub. It’s the world’s largest centre for international debt issuance, commercial (re)insurance and foreign exchange trading.
The UK is also the world’s leading net exporter of financial services, generating an industry trade surplus of £63.7 billion in 2020.
A new chapter for financial services sets out the UK government’s vision for an open, green and technologically advanced financial services sector that is globally competitive.
Key UK assets
The UK’s time zone makes it easy to do business with major markets to both the east and west within the working day.
One in 14 UK workers (2.3 million in total) are employed in financial and related professional services, and 2 out of 3 of these jobs are outside of London.
Important financial centres across the UK include:
- Edinburgh and Glasgow in Scotland
- Birmingham, Bristol, Leeds, Liverpool, Manchester and Sheffield in England
- Cardiff in Wales
- Belfast in Northern Ireland
The UK’s technology ecosystem is supported by expertise in artificial intelligence (AI) and cyber security. This system and knowledge have helped create a successful digital transformation of financial services operations and allow businesses to remain competitive in the market.
FinTech Bridge agreements with other fintech hubs including Singapore, South Korea, China, Hong Kong, and Australia create valuable opportunities for expansion and collaboration by reducing barriers to entry to international markets.
The Green Finance Institute champions the UK’s green finance brand internationally. It brings together global practitioners to design sector-specific solutions that channel money towards an environmentally sustainable economy.
The UK’s business schools have some of the world’s best MBA programmes. In 2021, 9 UK programmes made the Financial Times Global MBA’s ranking of the 100 best full-time MBA programmes worldwide.
Financial and professional services firms in the UK have access to a large pool of highly qualified talent. In 2018 to 2019, 184,155 students graduated across business, finance and accounting, computer and mathematical sciences studies. The Financial Services Skills Commission works with the UK financial services sector to ensure that it has the talent and skills it needs for the future.
Business and government support
The UK financial services sector benefits from a supportive regulatory regime. The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) work to build a competitive and innovation-friendly business environment.
Key initiatives include the creation of the:
- FCA’s Regulatory Sandbox
- Global Financial Innovation Network (GFIN)
- Open Banking framework
The UK Financial Services Act 2021 represents a major milestone in shaping the regulatory and legislative framework of the UK’s post-Brexit financial services landscape.
The City of London Corporation works to strengthen the UK’s competitiveness as the world’s leading global hub for financial services. It runs The Global City to showcase the UK’s offer.
Revolut is Europe’s largest challenger bank providing currency exchange, current account foreign exchange and crypto-currency services. In 2021, Revolut became the most valuable British fintech start-up. It reached a £24 billion valuation in its latest funding round, making it more valuable than high street bank NatWest.
Nossa Data is a London-based software company that provides companies with data management and analytics tools for ESG metrics. London’s potential client base, number of companies and sophistication in ESG thinking, is a key reason Nossa Data is based in the city.
NMI is one of the world’s leading card payment technology companies. It processes over 1.2 billion transactions a year from retail POS (Point of Sale), e-commerce and self-service terminals. Developed and based in Bristol, their solutions have been used across the globe in over 40 countries.