Last updated: 29 Jul 2024 12:00 Posted in:
Two-thirds (67%) of financial services leaders are more positive about the sector’s future following the General Election, according to KPMG’s latest UK Financial Services Sentiment Survey.
When asked why they were more optimistic, almost a quarter (23%) said the new government has good relationships with industry bodies and regulators, followed closely by a fifth saying the new government has a clear plan to grow financial services (22%).
KPMG’s survey also found the vast majority (90%) of leaders plan to increase their footprint outside of London in the next five years. Over half (57%) plan to open new offices outside the capital and 48% say they will expand existing regional offices.
Almost a quarter (23%) plan to expand across the East of England, followed by 18% eyeing expansion in Scotland and the Yorkshire and Humber respectively.
Manchester was the city outside of London cited most (47%) by leaders as having the greatest potential to be the UK’s second city for financial services, followed by Birmingham (20%) and Edinburgh (11%).
On top of their own expansion plans, more than a third of leaders (39%) say that the regional expansion of their global counterparts outside of London would most support financial services growth across the UK. A quarter felt that greater investment in regional infrastructure would boost sector growth outside of London, followed by 22% saying that local government needs to have more powers to support financial services clusters to help boost the sector’s presence across the country.
Katie Clinton, Partner, Head of Regional Financial Services at KPMG UK, said: “This is a vote of confidence for the vibrant and fast-growing financial services hubs outside of London. To fully realise the opportunity they offer the sector, investment in the infrastructure and talent underpinning their expansion is sorely needed.”
Looking to the rest of Q3, most sector leaders are confident about business growth (87%) and profitability (88%) over the period, driven by increased demand for products and services (49%), new technology (45%) and plans to enter new markets (41%).
Leaders also highlighted specific areas of focus to ensure sector growth over the next five years. Almost a quarter (23%) said innovation to help solve environmental and socio-economic changes such as climate change and ageing populations was needed. This was followed by 21% saying more effort was required to make the UK more attractive to overseas talent through infrastructure investment, housing and immigration changes.
The quarterly poll, which was conducted after the General Election, tracks sentiment among over 150 business leaders working across banking, insurance, asset and wealth and private equity.
“This is a vote of confidence for the vibrant and fast-growing financial services hubs outside of London. To fully realise the opportunity they offer the sector, investment in the infrastructure and talent underpinning their expansion is sorely needed.”
Katie Clinton, Partner, Head of Regional Financial Services at KPMG UK