Experts Share: What Influenced London’s Race To Lead The Global Financial Sector

New York is still named the top financial centre globally, and London follows closely after. The latest Global Financial Centres Index, released on 24 September, shows that New York received 763 points, and London is on 750- not too far out.

In 3rd place, Hong Kong has taken what was previously Singapore’s position, and then San Francisco still in 5th place.

Dublin made the biggest improvement, as the city went from 25th to 14th. On average, the report found that the rating of all centres fell by 0.42%, which shows stability, as opposed to a major growth rate. Frankfurt, Geneva and Luxembourg, for example, saw a drop in their ratings, though.

Outside of Europe, Bermuda saw quite a dramatic rise, as it went up 27 places, and then Doha went up by 24, and Riyadh went up by 21 places. In Asia, Kuala Lumpur improved by 18 places, some solid growth in the Asia-Pacific region.

 

What Are The Main Issues Global Financial Centres Face Today?

 

Geopolitical risks are said to be the biggest issue for financial centres, as 20% of respondents identify this as a problem. Issues like trade tensions, political uncertainty, and changing alliances have been concerns for cross-border financial services.

On top of this, the competition between financial centres has grown and continues to do so. Also, the rise of blockchain and cross-border payment platforms has also shown to be an issue and hold back. This tech has changed the financial space in a big way, and centres who can easily and quickly adapt to said changes, are likely at an advantage. International tax developments are also complicating the environment for financial hubs, and centres have to comply with new tax rules.

 

What Is The Outlook For Financial Centres?

 

While the top financial centres remain stable, there are indications of change coming. Centres in the Asia-Pacific region, particularly Hong Kong, Singapore, and Seoul, continue to perform strongly and could compete directly with Western dominance in the future.

In the Middle East, Dubai and Abu Dhabi remain in the lead, with Dubai rising four ranks to 16th globally. Some centres in Africa, such as Kigali and Mauritius, are also beginning to make their mark, supported by regulatory and infrastructure improvements.

 

What Do Experts Think Influenced London’s Position?

 

We’ve asked experts to break down the influences London has, for it to receive the 2nd place position. This is what they have to say…

 

Our Experts:

 

• Laurent Descout, CEO and Co-Founder, Neo
• Alessandro Hatami, Managing Partner, Pacemakers.io
• Kate Leaman, Chief Market Analyst, AvaTrade
• Josef Fuss, Co-Lead, Taylor Wessing
• Leo Labeis, CEO, REGnosys
• Shawn Du, Co-founder, Revenir
• Gerald Chappell, Co-founder and CEO, Abound

 

Laurent Descout, CEO and Co-Founder, Neo

 

 

“As the CEO of a Barcelona-based fintech with offices in London and Cambridge, I firmly believe the UK remains a great place to do business. Most major markets have suffered in the past year and in my view, the panic from some about London losing its position as a leading finance and tech hub has been completely overblown.

“London is much more accessible for fintech and start-up firms that want to go public and, contrary to recent complaints, has much simpler reporting mechanisms when compared to other financial centres. In addition, London has a deep pool of talent from prestigious universities and a wide array of investors, making it an excellent location to set up and run a fintech business.

“Many European cities are vying for its crown so the UK government must continue to champion the city as the key financial market centre, supporting start-ups, increasing investment and making it easier to do business.”

 

Alessandro Hatami, Managing Partner, Pacemakers.io

 

 

“London is a unique ecosystem driven by an unusual combination of factors:

“It has a big talent pool driven by the City that attracts talent from Europe and the rest of the world. There are also great universities within a short commute. The city has an established culture of venture investing and access to angel money coming from bankers with disposable income who also understand the need for financial service innovation.

“The UK offers generous tax benefits for venture investing such as the Seed Enterprise Investment Scheme and the Enterprise Investment Scheme. The English language makes it easier for startups to roll out internationally. The UK has a regulator that sees fintechs as a needed challenge to the big banks’ oligopoly. London is the gateway that provides access to the digital friendly mass affluent customer base of the UK. The city also offers large well oiled public markets for IPOs.

“London’s unique combination of financial expertise, tech talent, supportive regulation, and access to capital provides a strong foundation for future growth. However, to solidify the city’s status as the global fintech hub, the new Labour government will need to address challenges posed by Brexit, and international competition.There is also a need for ongoing innovation in both technology and policy.”

 

Kate Leaman, Chief Market Analyst, AvaTrade

 

 

“One factor that is aiding London’s rebound in the financial markets is the change of its stock market rules, which aim to make the UK a more enticing place for businesses to list their shares and close the gap on New York in trying to become the world’s top financial centre. These new rules came into effect on 29th July and are allowing companies to make more decisions without needing shareholder votes, simplifying the listing process.

“For shareholders, this means companies have further freedom in their decision-making. However, big moves such as takeovers still require shareholder approval, ensuring these stakeholders maintain a level of control. What’s more, the introduction of a dual share structure, where founders get stronger voting rights, is aiming to attract more tech startups to choose London over other markets.

“In fact, while these changes decrease some of the mandatory reporting requirements, they also apply further pressure on companies to be transparent as well as disciplined with their finances. Though investors may be concerned about the increased risk, the hope is that these reforms will improve growth and drive competition in the UK market, enabling London to become the leading financial centre.

“However, to attract high-quality companies to list in the UK, restore market competitiveness, and continue to challenge New York, these changes alone are not enough. Additional factors such as improved research incentives, enhanced policies that are focused on drawing global talent, and a tax system that supports employee stock options will all play a crucial role in making London a top choice for businesses looking to go public.”
 

 

Josef Fuss, Co-Lead, Taylor Wessing

 

 

“There are a number of reasons why London is strengthening its status as a global financial powerhouse: e.g. (i) attractive valuations, the perceived discount of UK targets compared to their US counterparts continues to attract US acquirers and investors to UK companies, (ii) strategic location, London continues to be a hub for trading currencies and derivatives with its strategic location allowing organisations to work seamlessly across Asia and the US at different parts of the day (iii) regulatory reforms, recent reforms such as the FCA reforms to the listing rules, are making it easier for companies to go public in London.

“Additionally, London benefits from a number of other factors that are normally mentioned in this context: a highly developed banking, professional and legal services sector centre, a vibrant cultural scene, huge talent resource and historic economic linkages to all major economies.

“In reference to 2023, London itself had suffered from the wider malaise of the return to life after Covid, war in Ukraine and the political turmoil that the end of 2022 culminated with the Liz Truss Budget. The last 18 months in the UK was an exercise in trying to right the ship, bring inflation under control and successfully begin re-growing the economy.

“The new Labour Government has placed economic growth at the heart of its agenda which includes plans for an industrial strategy to boost productivity and growth. Markets like certainty and with such a large Labour majority they can be more certain about what is in store for them over the next 2-3 years. It was also interesting to see that the OECD upgraded the UK’s growth forecast for this year to faster than that of Japan, Italy and Germany.”

 

Leo Labeis, CEO, REGnosys

 

 

“As time goes by and the immediate impact of the Brexit shock recedes from the rear-view mirror, London’s inner strengths as a financial centre naturally come to the fore. In addition to its financial ecosystem, London features a technology industry that is second to none in Europe, particularly for fintech. This unique combination contributes to London’s top position in both financial services and fintech.

“Nowhere is this more apparent than in the Regtech sector, which represents a critical growth opportunity for the UK. Strong alignment between government, regulatory bodies, and industry creates a robust framework that empowers firms to enhance compliance through advanced technology. London’s position at the forefront of this effort will not only bolster its financial ecosystem but also drive its ambition to lead on the global stage.”

 

Shawn Du, Co-founder, Revenir

 

 

“Despite all its hype, there’s no doubting that artificial intelligence (AI) and machine learning are playing a key role in London’s ascent as a global financial services hub, driving the evolution of the financial sector. AI-driven solutions improve efficiency and enhance the customer experience.

“AI integration also attracts global investment. Revenir recently raised £2.5 million to expand our AI-powered VAT refund technology globally, highlighting London’s appeal as a fintech innovation hub.

“Such advancements are helping London compete with New York by combining traditional banking with cutting-edge digital solutions. The UK’s strong regulatory framework and focus on fintech innovation further bolsters London’s position.”

 

Gerald Chappell, Co-founder and CEO, Abound

 

 

“London continues to thrive and maintain its place as a preeminent global financial hub for three key reasons: its deep talent pool, access to abundant capital, and a regulatory framework that, for the most part, works effectively.

“In other words, the key to London’s success lies in having the right people, working within the right regulatory environment, with access to the right investment opportunities.

“One standout example of smart, forward-thinking regulation in London, and a key reason my firm chose to establish itself here, is Open Banking. The UK was the first place in the world to adopt a regulatory-led approach to Open Banking, unlocking customer data and fostering competition and innovation, ultimately leading to better consumer products.

“Similarly, AI is poised to revolutionise our industry, but harnessing its potential requires specialists with advanced skills. And many of them are in London. My co-founder, for instance, holds a PhD in machine learning from Singapore. This city attracts talent from across Europe and the world—many drawn here by London’s world-class universities.”