The financial services sector is a significant contributor to UK income and employment. Over a million people in Britain are directly employed in financial services, and a further million in related services. As one of the largest export industries in the UK, financial services generated most of the UK’s trade surplus in 2012.
The City of London is the most highly ranked financial centre in the world, accounting for just under one-third of overall employment in the sector. However, most sector workers are employed in other thriving districts such as Manchester, Leeds, Bristol, Edinburgh, Glasgow, Cardiff and Belfast.
Within the EU, the UK is the largest centre for asset management, with almost £4 trillion worth of assets under management and providing direct employment to around 24,000 workers. Insurance companies employ around 300,000 people. The UK retail banking sector includes a vast number of commercial banks and building societies, broking firms, independent financial advisers, insurance brokers and credit card services. Roles can vary from customer-facing activities, business-to-business transactions and general management, to operational and specialist activities such as IT, legal and compliance, marketing and human resources.
The UK scores highly in terms of breadth of financial services, depth of specialism and global connectivity. Each of the UK’s financial centres has developed according to traditional competitive strengths such as proximity to existing industry, workforce availability, communications and transport infrastructure. Technological improvements have reduced the historical emphasis on geographic location, shifting the competitive focus to the flexibility of the workforce. This development has been matched by increasing availability of high quality business and professional education in universities and through strong regional presences of the major professional bodies.
Although the sector was badly hit by the credit crunch, the global economic downturn and more recently the LIBOR scandal, the UK financial services industry remains the most stable in the world. Many organizations in the industry are part of international groups or have international interests and clients based outside of the UK; these global firms can offer overseas career development opportunities, particularly in emerging economies where fluency in a specific language can be advantageous.
The latest figures from the Office for National Statistics indicate that financial and related professional services account for the following percentage of total employment opportunities in and around these major cities:
As the second largest financial hub in the UK and developed over three centuries, Scotland is recognised as one of Europe’s leading financial centres, offering key strengths within banking, insurance, investment management and asset servicing. It has a long history of innovation and a flexible and highly skilled workforce.
Around 60% of the industry’s jobs are in Edinburgh and Glasgow, where several UK banks are headquartered including Lloyds Banking Group, Clydesdale Bank, Royal Bank of Scotland, Tesco Bank and Virgin Money. With a strong reputation in general insurance, life assurance and pensions, Scotland employs 25% of the total UK workforce employed in these specialisms. It is also home to a number of insurance companies such as Standard Life, Scottish Widows, AEGON UK, Bright Grey, Prudential and Aviva, where these companies employ around 25,700 people.
Scotland’s asset management sector encompasses a broad mix of large institutional and smaller employee-owned firms employing 3,300 people locally and over 13,000 worldwide. Some £650 billion worth of funds are managed by investment management firms based here. Leading companies include Aberdeen Asset Management, AEGON Asset Management, Baillie Gifford, Franklin Templeton Investments, Martin Currie and Standard Life Investments.
There are a number of boutique investment management firms with headquarters or operations in Scotland. Investment management services cover the spectrum, from the more familiar collective investment products, institutional and pension fund management, through to specialist, hedge, venture capital and private equity investment strategies.
Scotland has been established as a major European centre of excellence in asset servicing for close to 30 years. This includes securities servicing, investment accounting, performance measurement, trustee and depository services and treasury services, shareholder services and compliance.
Accounting for 12% of Scottish financial services employment, global asset servicing companies with an operation include Bank of New York Mellon, BNP Paribas Securities Services, Citi, State Street Corporation, J.P. Morgan and Morgan Stanley.
Asset servicing is a well-paid and satisfying career path with many opportunities which, unlike most other industry roles, attracts school-leavers who may be keen to enter the workplace instead of continuing full-time study. This career stream is complemented by the Chartered Institute for Securities & Investment’s (CISI) world-leading Investment Operations Certificate (IOC).
West Midlands and North West
Home to over 80 banks, 50% of them overseas-owned, this region is focused around the three main hubs of Manchester, Liverpool and Chester and it contributes £11.7 billion to the sector and employs 320,000 people.
The recent update of Greater Manchester’s Forecasting Model (GMFM) anticipates that financial and professional services will produce more than 45,000 jobs within the next ten years, accounting for 40% of Greater Manchester’s GVA (Gross Value Added) growth.
Manchester is the UK’s northern hub for banking, retail finance, wealth management, insurance, law, accountancy and management consultancy, with niche specialisms in corporate finance, ethical finance and global custody. This year the Bank of East Asia opened an office in Manchester, reflecting the city’s growing business connections with China. Major businesses in Manchester include Royal Bank of Scotland, Co-operative Financial Services, Bank of New York Mellon and Bank of America/MBNA, employing around 10,000 people between them.
Firms in the North West have expertise in several fast-growing areas including Alternative Investment Market (AIM) listings, venture capital investment, public-private partnerships, private wealth management and maritime and environmental law.
Financial and professional services employers in the region have access to a strong supply chain of financial, accountancy, business management and legal graduates from North West universities, including two of Europe’s leading business and management institutions, Manchester Business School and Lancaster University Management School, as well as Manchester’s College of Law.
Leeds offers local and international expertise in accountancy and legal services, banking, insurance, stockbroking and venture capital. The financial and professional services sector is one of the largest contributors to the Leeds city region economy, employing 46,400 people, which represents more than 11% of the region’s workforce.
Over 30 national and international banks are represented in Leeds and many have their regional or northern centres in the city. Three of the top eight building societies are in Leeds, along with the Bank of England’s note issuing centre.
For many years this region has been an important UK centre for insurance outside London, representing all aspects of the sector. It is a major centre for non-life insurance and for ‘direct’ sold insurance with major operations for UKI Partnerships, Direct Line, Privilege Insurance and Zurich Insurance.
Generating over 9% of all UK graduates, the region benefits from several top-ranked universities and business schools offering finance and business education.
Wales has a deep pool of 136,000 skilled professionals working in financial and professional services. There are a number of key sub-sectors in which Wales has a significant presence. These include cards and payments, asset finance, fund administration (including wealth management), mortgage administration, securities trading, insurance, legal services, shared-service centres and business process outsourcing.
Wales has become one of the best places in Europe for businesses looking to improve costs and customer service. International businesses from Tesco and L&G to Virgin and Lloyds TSB have created shared-service centres in Wales and the region has also become the European centre for web-enabled customer comparison sites with headquarters for Go Compare, Moneysupermarket.com and Confused.com.
A quarter of the total workforce of Cardiff is employed within this sector. Thanks to a skilled, enthusiastic and highly trained workforce, supported by ten universities, Wales is one of the UK’s most buoyant and fastest growing locations for financial services. It has one of the EU’s highest staff retention rates with over 50% of all students in Welsh universities graduating in business and information and communication technology disciplines that are tailor-made for careers in business and financial services.
The financial services industry in Northern Ireland is concentrated in international banking, insurance, asset servicing and financial services technology. Offering significant cost advantages compared with London and New York, Northern Ireland is an ideal centre for middle and back office activities within the financial services sector, including financial services software development, infrastructure support, fund administration, operations (reconciliation, settlement, clearing etc.), analytics and risk management.
The industry employs over 32,000 people in more than 1,200 firms. Some of the major international financial services companies that have established operations in Northern Ireland are Citi, the Allstate Corporation, Liberty Mutual and NYSE Euronext. The financial services technology sector is especially strong with specialist software development centres established by NYSE Euronext and others to service high profile financial services firms in global centres worldwide. The region boasts excellent uptake of graduate and postgraduate programmes in finance, accounting and computer science.
Republic of Ireland
While Ireland has succeeded in attracting some of the world’s largest financial services operations to establish in Dublin, the last ten years have seen the emergence of a successful domestic industry, with almost 6,000 people currently employed in lrish owned firms. What was originally envisaged as a niche urban regeneration initiative has developed into a nationwide industry that is a significant contributor to national prosperity, consisting of more than 500 firms which directly employ over 32,000 people and contributing 7.4% of the Irish GDP.*
Dublin’s International Financial Services Centre is host to half of the world’s top 50 banks and to half of the top 20 insurance companies. These include:
- ABN AMRO
- BNP Paribas
- EMRO Finance
- JPMorgan (Chase)
- Merrill Lynch
- Sumitomo Bank.
The centre has been an outstanding contributor to the Irish economy over the past 20 years, employing in excess of 25,000 people and generating €22 billion or 35% of service exports.
As a regional financial centre, Dublin has a number of unique advantages, such as the only English-speaking common law jurisdiction within the eurozone, favorable taxation arrangements attracting substantial foreign direct investment, good availability of highly qualified staff (including specialists in complex structured finance deals), and a modern infrastructure, including excellent air transport links to Europe and North America.
The Republic of Ireland is the largest domicile in Europe for offshore funds, the largest administration centre for exchange-traded and hedge funds and it has the largest stock exchange listing for investment funds. Over €600 billion in assets is serviced within listing, management, administration, custody and trustee-related activities. The country also has the fourth largest reinsurance market in the world and is a major player across a range of insurance markets.