Guest blog: Why the UK must take action now to remain Europe’s top destination for financial services investment

22 June 2022

Many businesses hoped 2022 would be a year primarily defined by recovery and growth, with the most severe effects of the pandemic behind us. Yet the last few months have borne witness to new challenges in the form of growing geopolitical unrest, which is creating global economic uncertainty. 

Against this backdrop, EY launched the UK Attractiveness Survey for Financial Services, publishing the latest foreign direct investment (FDI) data and a sentiment survey of global investors to understand how attractive the UK financial services sector currently is as an investment destination.  

Despite financial services FDI falling across Europe in 2021, the UK’s project numbers increased in the same period (by 12.5% to 63 projects in 2021) and continues its 20-year lead as Europe’s top destination for such investment. Whilst the rise recorded is below the peak of 112 projects in 2018, it demonstrates the increased confidence investors have in the UK’s financial services market year on year, despite many challenges. Hopefully, this is the start of a new upwards rise.

Looking at the UK’s position relative to other European markets, we can see its lead has narrowed, and the gap between the UK and second-placed France closed significantly in 2021. France recorded just three projects less than the UK (60) in 2021 — its highest number in the last 10 years. France is an increasingly popular country for financial services investment and these results should signal to the UK that more needs to be done to retain its leading position. However, the UK did secure a greater number of ‘new’ projects in 2021, which tend to involve higher levels of job creation.

Alongside the FDI figures, we asked investors how they think the UK’s attractiveness will evolve. In our latest survey, 92% of global investors stated they believe the UK will retain or improve its attractiveness over the next three years — a record high, and up from 90% in November and 75% in April 2021. It’s really encouraging to see that, despite the current global economic and geopolitical challenges, investor sentiment around future attractiveness and planned investment in the UK is so positive.

Perhaps unsurprisingly, London remains the top European city for financial services FDI, although we’re seeing movement within other regions and cities. Within the UK, our latest survey shows that the West Midlands has replaced Scotland as the second-largest recipient of financial services projects (a title Scotland held for seven years), and Northern Ireland, the South East and the South West of England have all experienced growth. In terms of the UK Government’s levelling-up policy, 63% of investors said they would look to invest in regions where Government support was available. Meanwhile, at a European level, Paris moved up the ranks, securing 38 finance projects in 2021 (up from 21 in 2020) — its highest number over the last 10 years.

The pandemic has driven an increased spotlight on sustainable finance and climate change risk, and 89% of investors said it was important — when considering where to invest — that countries have strong, sustainable climate policies in place. This result highlights that UK firms must continue to prioritise the sustainable finance agenda. This will help ensure that we collectively raise standards and offer the right environment for environmental, social and corporate governance (ESG) investment.

The increased competition and narrowing of the gap with France emphasise the need for the UK to ensure that it’s doing all it can to demonstrate market attractiveness to potential investors. We know from our survey that the top three priorities for investors are: progress on levelling up (40%); improving social infrastructure — which has rapidly climbed in importance to 30% (and wasn’t within the top three priorities in our last survey) — and improving the skills of the UK workforce (28%) — which had the same position in our last survey. This provides a helpful guide to Government and industry in terms of what those looking inward are keen to see if they’re to invest in the UK.

The UK is a world-leading financial services market and much of what it takes to lead on FDI comes naturally. However, there is no room for complacency. With other markets mounting an increasingly strong challenge, it’s more important than ever that the UK actively looks to improve its offering to potential investors.


EY’s UK Attractiveness Survey for financial services launched on Monday, 13th June 2022. Read our press release here.

*UK financial services field research was conducted from 9th March 2022 - 10th May 2022, based on a representative panel of international decision-makers across banking, insurance, wealth and asset management and FinTech.

Anna will be chairing the 'Long-term competitiveness, long-term growth' panel at our Annual Conference 2022. Find out more and register here.

Anna Anthony photo
Anna Anthony Managing Partner, Financial Services, EY