With its well-earned status as one of the world’s economic powerhouses, London has long been recognised as the UK’s main financial hub. Factor in iconic institutions such as the Bank of England and famous business districts in the City and Canary Wharf, and it is easy to see why for many overseas investors, the UK financial services sector is all about London. Yet beyond the capital, there are plenty of regional financial centres that are making a significant contribution to the nation’s economy.
Of more than two million people who work across the UK financial and related professional services industry, two-thirds are employed outside London, according to a recent report by TheCityUK, which champions the international competitiveness of the sector. The report also found that 22 towns and cities in the UK have more than 10,000 people employed in financial and related professional services.
"Established multinational firms like BlackRock have built up a substantial presence in Edinburgh"“Major financial organisations tend to think that the UK and London are the same thing, but our financial services sector has so much more to offer besides the capital,” says Chris Cummings, Chief Executive of TheCityUK. “More and more firms are realising what our other cities and regions have to offer, with the likes of J.P. Morgan, Citibank and Deutsche Bank looking to expand their footprint within the UK.”
Relocation, relocation, relocation
In recent years, cities nationwide have benefited from major financial companies creating service hubs or expanding existing ones outside London to support their regional or global operations. A falling corporate tax rate, combined with government grants aimed at attracting foreign investment, has promoted a number of firms to reverse offshore decisions in recent years and relocate activities back to the UK.
Allen & Overy has begun moving its US and European support operations to Belfast after receiving a grant from Invest Northern Ireland; Citibank now employs more than 1,000 people to provide IT and legal services from its Centre of Excellence in Belfast; and Deutsche Bank has expanded in Birmingham.
North of the border, Scotland is recognised as one of Europe’s leading financial centres, with some £800bn worth of funds managed by firms such as Baillie Gifford and Martin Currie. It is also home to a number of highly successful locally grown companies including Alliance Trust, which has headquarters in Dundee, and Aberdeen Asset Management.
Edinburgh (pictured right), meanwhile, is the base of Standard Life, where Chris Clark MCSI, President of the CISI Scotland branch, works as Investment Group Relationships Analyst.
“Edinburgh has a solid base of firms that cover a broad cross-section of financial services, as well as a support network of accountants and lawyers, and that base appears to be growing,” says Clark. “Established multinational firms like BlackRock have built up a substantial presence in Edinburgh, with investment teams and operations staff now based here, and new entrants like Green Investment Bank have chosen the city for their head office.”
Like many UK cities, part of Edinburgh’s appeal for financial firms is the high quality of living it offers at relatively low cost compared to London, reckons Clark. “The city is a lot smaller and the commute is a lot easier than travelling to and from Central London, plus housing is a lot cheaper – you get much more for your money.”
Just as importantly, Edinburgh can satisfy even the most ambitious worker by offering financial services jobs “all the way up to senior executive level,” emphasises Clark. This is the case across the UK, notes TheCityUK’s Cummings. “A myth has built up that all financial services jobs outside London are in low-value back office roles, but many of the jobs on offer are in highly sought-after positions.”
Providing local talent who can fill financial services positions is something that many of the UK’s regional financial centres do particularly well, according to Cummings. He says: “Partnerships between businesses and universities are really important, because what a business always wants to know is, can they recruit good graduates?”
“You would be only an hour away from another office”
With ten universities supporting its financial and related professional services, Cardiff is a shining example of how a city can build links between higher education institutions and financial services companies. Atradius, Admiral Group, GMAC and Composite Legal Expenses recently joined forces to provide Welsh graduates with employment in the industry under the new Welsh Financial Services Graduate Programme. The pioneering new scheme, funded in part by the Welsh Government’s Sector Priority Fund, will give university leavers paid work at the four companies, along with structured training and a postgraduate qualification.
With 19 branches nationwide, the CISI’s network plays a key role in helping the UK’s regional financial centres to flourish.
The nationwide coverage, which includes Channel Islands branches in Jersey and Guernsey, gives CISI members plenty of opportunities to network. Each branch holds regular CPD, social and networking events, which help members keep up to date with developments in financial services.
Members can stay informed of what is happening in their branch by visiting the My Branch section of MyCISI. Ten branches have their own LinkedIn networks too, allowing members to network online with professionals in their region.
Find your local branchThe CISI’s Scotland branch has shown a similar commitment to bringing financial services and higher education closer together. “We have close links with professional bodies and with educational institutions such as the University of Edinburgh Business School,” says Clark. “Students are very interested in our CPD events, which are well attended.”
Forecasting regional growth
A strong talent pipeline will support future growth in the UK’s regional financial centres. A recent report by PwC forecasts that the UK financial services sector could add £62bn to annual economic output by 2020 and create nearly 50,000 jobs in the sector, with this growth partly driven by UK regions outside London. The report predicts that Scotland’s output will grow by 3.7%, the North West’s by 3.6%, the West Midlands’ by 2.9% and the South West’s by 2.5%.
The growth prospects for cities outside the capital will be greater still if High Speed 2 (HS2), the planned high-speed railway, is built, according to TheCityUK’s Cummings. “It would make Birmingham, Manchester and Leeds much easier to commute to from London,” he says. “You would be only an hour away from another office.”
Regardless of whether or not HS2 goes ahead, the UK’s regional financial centres appear to be on the right track to achieve further growth in the years ahead, and perhaps grab some of the limelight from London along the way.