Anne Richards DBE, Chair of TheCityUK Board, gave the following speech today to TheCityUK Annual Conference 2022, held at the QEII Centre in London.
Good morning everyone.
Welcome to TheCityUK Annual Conference 2022, the first to be held in-person since the pandemic began some two and a half years ago.
To start, I would like to thank our conference sponsor, EY, for their support, as well as gold partners Citadel Securities and DLA Piper.
It is a real privilege to speak today for the first time as TheCityUK chair, at what is a critical juncture for our industry. And I am grateful for the work of my predecessor, Mark Tucker, who stewarded us through an incredibly demanding three years.
In his last speech, Mark said he hoped my tenure would be calmer and quieter than his. But, while I might share that hope, I fear it is already dashed.
For a start, we have emerged from the Covid-19 pandemic into an uncertain world. The Russian war in Ukraine is challenging geopolitical stability, causing humanitarian, energy and food crises.
And we are confronted with growing threats to globalisation: from disrupted supply chains and barriers to the flows of people, capital and goods on which the global economy relies.
All of that has brought us to a period of economic sluggishness and rising inflation, pushing up the cost of living and reducing real wages. These are the most immediate challenges.
But longer term, as an industry, we will also have to get to grips with deeper structural changes.
Firstly, the digitisation of many areas of life will alter the way we interact, do business, and may even make the essence of money itself unrecognisable. And secondly, the physical effects of climate change and their consequences are inescapable.
To get us through a successful transition to net-zero demands a new financial outlook, increased investment, and changes to conventional thinking in many areas of business.
So, these are the great forces shaping the world. And we must adapt. They are also issues that confront individuals as they make crucial decisions about their careers, their spending and in planning for their financial futures.
Our broad industry, from insurance to banking, and from asset management to professional services, supports and enables those decisions. Finance is the thread that links people, companies and economies together to bring good ideas to life and to build prosperity for the economy as a whole.
And we should be proud of the heritage of excellence here in the UK.
Our industry has faced a world of risks before, and thrived in it.
From the Industrial Revolution to the digital transformation, the UK’s financial centre has brought the world together to manage the risks of international trade, building networks of finance, insurance, legal and accounting expertise that together are greater even than their parts.
And that expertise is widely accessible right across the UK, not just in London but in cities from Bristol, Birmingham, Belfast, Cardiff and Leeds to Manchester, Newcastle, Edinburgh and Glasgow, to name just some prominent examples.
Financial and related professional services are central to UK economic growth and a key export, with nearly half of those exports from outside London. As our latest UK Key Facts reports sets out, the industry also contributed £261bn to UK Gross Value Added in 2021.
Meanwhile London and other financial hubs across the UK have become global centres for fintech, AI innovation, and digital investment platforms.
More than 600 fintech deals were completed last year in the UK, with total investment up sevenfold since 2020. In 2021, the sector also attracted the highest level of investment in Europe and second only to the US globally.
Much has changed over our history and in that time, we have learned that out of great risks and challenges come a wealth of opportunities.
The climate and clean energy revolution will be no different.
New businesses and technologies will need funding, and finance metrics themselves will evolve as we learn how to account properly for climate risks.
The UK has a unique chance to influence the discussion at a global level through its key role in advising global companies on their sustainability strategies.
By acting quickly and with purpose, we can build on these foundations to make the UK:
- a global leader in transition finance,
- a leading centre for science-led economic progress
- and an engine of career development and jobs growth in the fight for international talent.
These are the key battlegrounds of international competitiveness for the next few years and also the sources of our biggest opportunities.
To take advantage of them will require a focus on three areas:
- And cooperation.
It’s a while since I was in full-time education, but it’s never been more important to me.
As a chief executive in a people-based industry, my company’s success depends on recruiting, training and retaining a workforce that can compete with the best.
The UK’s nationwide ecosystem of financial and related professional services centres is an industry where the world wants to work and other countries seek to emulate.
We must be confident but not complacent about that status. Our industry has long been a magnet for domestic and international talent. We need to maintain that by offering the right training and skills to people from all walks of life and make it easier for talented people to come here and work.
Financial and related professional services employ over 2.2 million people, providing about 1 in 14 of all jobs in the UK, with two thirds of those jobs outside London.
So it’s essential, both for the international competitiveness of the industry and the UK, that our knowledge base keeps up with a changing world.
The finance sector also plays a central supporting role at every step in the cycle of innovation and growth. From early-stage funding for small companies in the private markets to leading businesses through to the public markets as they mature, helped along by legal, accounting and audit services. We all benefit if the right type of funding comes through at the right time.
In particular, we must focus on industries such as biotech, climate tech and digital services to ensure our industry is there to support those small companies with great ambitions that will provide jobs and growth in the economy of the future.
Here as well, as part of a digital strategy, we have an opportunity to champion common international rules for digital trade and seek targeted agreements on data transfers with key trading partners in financial services.
And finally, and perhaps most importantly of all, cooperation. This is a diverse industry, operating across a diverse policy backdrop, sometimes with diverse requirements. But we share a common vision of success. One that depends on continuing to attract the most exciting talent to our industry, whether at home or from abroad. To attract people and, indeed, capital to the UK, we must be clear and coordinated in our mission.
Only in partnership, bringing all our collective expertise to bear across different government departments, regulatory agencies and industry, can we form a coherent approach to the complex questions of the day. We must strengthen the threads that bind us.
I am committed to pursuing these three priorities of education, innovation, and cooperation, during my time as chair of TheCityUK. But we don’t operate in a vacuum - other financial centres in other countries have their own ambitions.
Whether it is France’s innovation clusters that bring together SMEs, large companies, and universities to focus on a specific topic, or observing the great strides made by Israel’s fintech sector or the adoption of mobile banking in Kenya. Or even noting Singapore’s Green Finance Taskforce that acts as a forum for industry, regulators and policymakers to accelerate the transition.
It is important to look outward as well as inward if we are to give as much support as possible to the UK’s economy. We face new evolutionary forces that would have been quite unimaginable a century or even a decade ago.
And so, I believe that there are many exciting prospects ahead of us even if the potential risks are considerable.
And any historian of our industry will know, the UK has had to navigate such waters many times before. So, I’m looking forward to working with all of you to make the most of the opportunities that the next few years will bring so that our industry can continue to thrive and bring benefits to people right across the country and beyond.
There has never been a more important time for us to play that role. I know it’s a challenge that everyone here today will rise to.