The financial services sector across the whole of the UK is needed to drive the economy, not just London - Chris Hayward

There is much at stake. The financial and professional services sector provides more than 2.5 million jobs, the majority outside of London and the South East, alongside £100bn in tax contributions each year. Everyone across the UK interacts with FPS every day, whether it be through daily purchases, taking out a mortgage, or seeking investment and legal advice for your business. It is the very heartbeat of our economy, and we should be focusing on ways to support it.

This year, the City of London Corporation set out a bold ambition to strengthen the UK’s position as a global financial powerhouse. Our report, Vision for Economic Growth: A Roadmap to Prosperity addresses the key areas where government, regulators and industry must work together to support a competitive industry and compete on an international scale.

We come at this challenge with solid foundations, but there are opportunities to build an even more dynamic and robust economy. Issues regarding the health of UK capital and equity markets that have been well-highlighted. These debates suggest an existential crisis, which is far from the case. A lot of thought and good work has already been completed to create solutions such as the Hill Review on listings, the Kalifa Review on fintech, the Austin Review on capital raising, and the Kent Review on investment.

To boost our FPS sector and drive economic growth, we must invest in technological innovation. This will require reforms to boost secure data sharing and an innovative approach to data policy and regulation.

We should embrace new technologies such as AI, tokenisation and open banking to strengthen our position as fintech leaders. The UK already does well here, attracting more fintech investment than the next ten European countries combined. The so-called Northern Triangle tech start-ups – those based in Leeds, Sheffield and Manchester – have raised £1.3bn in funding over the last five years, highlighting again why all of UK FPS – not just London, must be engaged to unlock the full potential of the sector to grow the economy.

Digital verification and its associated products and services could add up to £5bn to the economy. This would be a scenario where we would be playing to our strengths. Doing so will increase the attractiveness of the UK as an investment opportunity.

Alongside this, we should be looking to build an FPS knowledge and support hub to showcase UK plc to the world. Sharing the world-leading expertise we have in the sector will increase interest in our financial and professional services and could increase international investment by up to £225bn between 2024 and 2030. Greater inward investment will mean more jobs, more tax receipts and better services for our country.

We must be able to effectively highlight innovative sectors developing here in the UK from the bustling fintech and legal work in Leeds to the nature finance leadership in London. In 2022, foreign direct investment into our financial services sector totalled £2bn, bringing 15,000 jobs with more than half these jobs outside London. We’re on a good course – but we can supercharge our efforts to produce nationwide growth.

The UK has a fantastic opportunity to make the most of its international relationships and position for global trade, but it is time we became bolder with how we think about exports.

Service exports were worth £401bn to the UK in 2022. Supporting and promoting our export firms all around the country will provide more income, jobs and growth potential for UK businesses and the wider economy.

We must also ensure that we have a strong hand on becoming a more sustainable place to do business, demonstrating how financial markets can help support the journey to net zero.

Whilst the UK has undoubtedly been a leader in focusing on ESG credentials and championing sustainability across business and infrastructure, we need to solidify that lead, becoming the go-to partner for green finance.

After many years of low economic growth, it is critical that we now put our foot on the pedal. Unlocking vast economic opportunities around the whole UK and providing a strong foundation for decades of economic growth to come will not be easy, but it can be done. Working together, politicians, business and regulators can create transformative change.

Chris Hayward is policy chairman at the City of London Corporation.