The UK’s trade surplus in financial and related professional services was £79.7bn in 2019, according to estimates by TheCityUK in its latest annual report of key facts about the UK as an international financial centre.
The scale of the nation’s financial services trade surplus at £60.3bn in 2019 is almost as much as the next two leading net exporters – the US and Switzerland – combined and demonstrates the UK’s competitive position in global financial markets.
As well as looking at the major economic data, export destinations and global market share, TheCityUK’s report also examines the leading role the UK plays in a number of specialist areas of financial services. The report lists green finance, Islamic finance and maritime financial services as sectors where the UK has been at the forefront of development and innovation.
The UK’s strength in FinTech stems from the colocation of a world-leading financial centre with a strong and fast-growing technology sector. As of the first half of 2020, the UK FinTech market generated revenue worth £6.6bn and employed 76,500 people. The average amount of capital UK FinTechs received from investors was £20.1m in 2019, up from £15m in 2017.
Anjalika Bardalai, Chief Economist and Head of Research, TheCityUK, said,
Metrics such as these are a testament to the UK’s global competitive advantage in financial services and underscore the industry’s status as a significant national asset. They also demonstrate the country’s role as the world’s most internationally-oriented, full-scale hub for such services.
“The UK’s strength in this area stems not only from the high volume and value of transactions, but also the breadth of services and expertise available—the ‘ecosystem’ effect. This ranges from green finance to Islamic finance, and is supported by an extensive network of professional services related to financial services: legal, accounting and consulting.”
The UK’s financial services trade is conducted primarily with other advanced economies. According to TheCityUK report, the US is the largest single destination for UK financial services exports, accounting for 30% of total financial services exports. As a bloc, EU Member States accounted for 34% of total sector exports, with countries in Asia accounting for 16%.
The UK is the largest global net exporter of financial services (ahead of the US, Switzerland and Singapore) and holds the number one spot in several global markets, including cross-border bank lending (15% global market share), interest rates OTC derivatives turnover (50% global market share) international debt securities (13% global market share) and foreign exchange turnover (43% global market share). To put this into perspective, around 2.5 times as many dollars are traded in the UK as in the US.
Other key facts:
- The UK is one of the largest markets in the world for fund management, behind only the US. UK assets under management totalled a record £9.9trn ($12.6trn) in 2019 and the sector has a strong international orientation.
- The UK insurance sector is the biggest in Europe and fourth largest in the world. UK insurance premiums represented around one quarter of premiums in advanced European economies and 5.8% of global premiums.
- The UK legal services sector is the largest in Europe and second largest globally. At £36.8bn, UK legal services revenue accounted for 5% of the global total in 2019.
TheCityUK’s report uses the latest available annual data (2018-19) and therefore does not attempt to measure the impact of the Covid-19 pandemic on international trade.