Against a backdrop of rapid global change and with an eye to the future beyond Brexit, in collaboration with PwC, we set out a bold roadmap to secure the UK’s future as a world-leading international financial centre in the award-winning report: ‘A vision for a transformed, world-leading industry’. Recognising the great challenges facing the industry, interviews with senior practitioners, policymakers, regulators and other key stakeholders confirmed the appetite for change and transformation.
The roadmap ahead has set clear expectations around where the industry needs to make progress and the priorities of members, and has underpinned our work. Supported by good engagement and dialogue with government, regulators and industry, strong momentum is being made across the breadth of recommendations which include everything from FinTech, innovation and enhanced trade and investment through to skills, talent, tax, regulation and overall competitiveness.
With a growing number of operational threats, a firm’s approach to preventing or recovering from these and how they protect their customers is critical to their future competitiveness, sustainability and reputation. This was made clear in our 2019 with PwC: ‘Operational resilience in financial services: time to act’, which set out a series of recommendations for both industry and regulators to become more operationally resilient. The launch event featured a keynote from the Deputy CEO of the PRA, who commented that the report was “an important milestone in a drive towards improving the operational resilience of the UK financial services sector”.
Subsequently, the report has been distributed across the global network of an international bank to inform its operational resilience planning and management; and a major market infrastructure company is using it to shape its approach to enhancing its operational resilience.
With sights firmly fixed on the industry’s global competitiveness post-Brexit, alongside EY, we made clear the urgent need for reform to the UK’s immigration system in our 2018 award-winning report ‘The UK’s future immigration system and access to talent’.
While the report focused on the needs of the financial and related professional services industry, its nine practical recommendations set out a dynamic approach for a renewed immigration system that is applicable to all sectors. Many of those recommendations – developed through engagement with senior practitioners, key stakeholders, and senior policymakers – have since been aligned with Migration Advisory Committee recommendations and government announcements in this area, including offering flexible visa-free travel to visitors from the EU and reviewing the administrative burden associated with immigration.
Given the importance for the industry of being able to continue to attract, recruit and retain vital talent from across the EU and the rest of the world, we will continue to push for provisions for mutual access to skills and talent, streamlined employee immigration and visa-free short-term business travel.
We played a central role in helping establish core capabilities for the international financial centre in Astana (now Nur-Sultan) and had a prominent role in its official launch in 2018.
We brought firms from across the industry to Astana to work alongside key Kazakh stakeholders, senior ministers and officials to develop a draft corporate governance code and roadmap for implementation; publish a Board Steerage Code; and support the training of AIFC judges who now preside over English language courts in the financial centre, established under the principles of English common law and based on the UK dispute resolution procedures. We continue to broaden our support of the AIFC across all areas of the industry, led by the interests and objectives of our members.
We were the industry partner to the HM Treasury’s Financial Services Trade and Investment Board (FSTIB) since its inception in 2013 until 2019. Its goal was to inform the government’s financial services trade and investment priorities, support UK firms to export abroad, attract inward investment and bolster the sector’s competitiveness.
Through our market advisory groups (MAG), we supported the delivery of the UK-US, UK-China and UK-India workstreams – each focused on enhancing financial cooperation – and the FinTech workstream, which strengthened the UK’s position as a world-leading FinTech hub. Key outputs across all workstreams have helped to progress the FSTIB’s aims.
A recent example, in mid-2019, was the high-profile UK-China Financial Services business summit and programme of activity developed and run by the China MAG as part of the UK-China Economic and Financial Dialogue between the Chancellor and the Chinese Vice-Premier – a key forum to progress financial cooperation and industry issues, raise industry profile and build important bilateral networks.
We are the driving force on the UK side of the India-UK Financial Partnership (IUKFP), established in 2014 by the Chancellor of the Exchequer and Indian Finance Minister. Working with Kotak Mahindra Bank in India, our members and Indian financial and related professional services firms, nine policy papers have been published on topics aligned to the Government of India’s reform priorities.
Many of the recommendations made in those have either been implemented or are being discussed with a view to implementation. For example, the recommendations to India’s Bankruptcy Law Reform Committee (BLRC) when it was considering reforming India’s complex insolvency landscape were used in its draft bankruptcy law and passed into statute by the Indian Parliament in May 2016. We continue to help drive forward the IUKFP’s work to deepen bilateral relations, influence policy outcomes, build networks and lay the foundations for greater business opportunities for our members.
In his 2018 Mansion House speech, the Chancellor of the Exchequer announced the creation of a new industry-led Financial Services Skills Taskforce which he asked us to convene and former City Minister, Mark Hoban – a TheCityUK Board Director – to lead. Against a backdrop of unprecedented technological and social change, the Chancellor’s aim was to ensure the sector has the skills and talent it needs to remain globally competitive into the future.
The work – undertaken in collaboration with the City of London Corporation and EY – shines a light on the significant challenges facing the sector in terms of its changing skills needs and the aspirations of the people it employs. It calls for transformational, system-wide change and sets out a roadmap for how some of the major issues identified through its research can and will be addressed. Among the recommendations of the Taskforce’s final report was the establishment of an independent body to deliver the necessary actions. With the support of HM Treasury, the Financial Services Skills Commission has been set up to take this work forward.
We have long produced thought-leading research and economic data, providing essential facts about the contribution and value of the industry to the UK economy and its strength across the country’s regions and nations and insights about its opportunities to extend this into the future. Facts such as: ‘2.3 million people are employed in the industry – two thirds outside of London’ and ‘one in 14 people are employed in the industry across the UK’ and ‘nearly 50% of financial services exports are generated outside London’ are regularly cited by Ministers and policymakers; the City Minister called the International Key Facts report “brilliant research” on Twitter.
A recommendation made in a 2017 report to improve the quality and quantity of regional economic data led to the ONS embarking on an extensive statistics transformation programme which included lots of new regional economic data. The reports have also led to the Chief Economist being invited to give oral evidence to both the House of Commons International Trade Committee and the House of Lords EU Financial Affairs Sub-Committee. The programme continues to expand into new and burgeoning areas, with strong collaboration with members, and underpins work across the organisation.
Through our Swiss Market Advisory Group’s work with Swiss industry body economiesuisse, we have lobbied both Governments to focus on expanding existing services links and investment bilateral ties. Together we produced a joint paper in early 2018 on industry priorities for the UK/Swiss relationship and a second paper published in April 2020 outlines joint industry asks for a bespoke UK-Swiss industry agreement post-Brexit.
Industry in both markets have committed to working collaboratively to support both governments in achieving an ambitious agreement. This would be both a template for other future agreements and a demonstration of how major financial centres can work together to achieve frictionless industry engagement with potential major benefit to both markets.
Together with the US Securities Industry and Financial Markets Association (SIFMA), we have established the US-UK Financial and Related Professional Services Coalition to strengthen trade and cooperation between the two countries in this industry.
This forum now includes 17 industry trade associations from both sides of the Atlantic and provides a platform through which the UK and US financial and related professional services industries are working together to come up with joint asks for UK-US regulatory cooperation. By making sure that the UK and US industries speak with one voice on how they would like to work together, the Coalition is providing significant support for future UK-US trade and regulatory dialogues.
In the face of increasing pressures on the UK’s justice system and a growing budget shortfall, the then Lord Chancellor and Secretary of State for Justice and Ministry of Justice officials identified a levy on the top 100 law firms as a potential solution. With grave concerns about the impact this would have on the international competitiveness of UK legal services, we executed a successful campaign to make clear the proposal’s potentially damaging consequences and implications with a range of senior government stakeholders. The levy was ultimately not introduced, with our role in helping to deliver this outcome widely acknowledged by the industry.