London is now within a whisker of ousting New York as the world’s leading financial hub, new rankings reveal, but risks remain over the capital’s fintech prospects. The UK capital is at the heels of the Big Apple with just a singular rating point between the two.
New York once more topped the rankings in Z/Yen’s 38th Global Financial Centre’s Index (GFCI 38) but lost three points whilst London gained three. While none of the top ten changed their rank, there was just a singular point separating each member of the top four.
The GFCI ranking also showed London held onto its European crown towering above Frankfurt and Geneva — which took second and third place — by nearly 20 points. But elsewhere, London took a tumble in the fintech rankings — an area where it previously looked like it could seize New York’s crown.
When it comes to fintech, Hong Kong and Shenzhen have now claimed the top spot with London’s rating dropping by five points sending the UK capital to fifth place. Janine Hirt the chief executive of fintech’s industry body Innovate Finance said: “The risks posed by international competitors are very real. Countries around the world are increasingly vying to be the destination of choice for innovators and as our recent half year investment report found, the UK has for the first time in nearly a decade slipped from second to third place in terms of securing global Fintech investment”.
London has battled a series of dreary news in the fintech sector — despite attempts from Chancellor Rachel Reeves to bolster the sector — with money transfer firm Wise ditching its listing and Klarna snubbing London’s financial district (known as the ‘City’) for Wall Street.
Whilst the industry remains a European leader, its global status had faced renewed threat.
A spokesperson for the Financial Conduct Authority said: “Supporting growth and competitiveness is a corner stone of our strategy to help maintain London and the UK’s position at the forefront of global finance across sectors such as fintech, banking and investment management.
“This year alone we are working at pace to deliver nearly 50 initiatives to support the growth mission. This includes rebalancing our approach to risk to unlock innovation, attracting more inward investment, encouraging the export of UK financial services and making it easier for firms to establish here and create jobs, while maintaining standards that underpin our global reputation”.
Chairman of the Z/Yen and former Lord Mayor of London, Michael Mainelli, said: “The extreme close ratings of centres in the index shows the intensity of competition among leading financial centres from the highest rated to the lowest.
Cyber security: Cyber attacks in the UK and on the continent is becoming a major issue. Almost half of businesses in four of the largest European economies reported at least one cyber attack over the last four years, resulting in costs exceeding 300 billion euros (£261 billion).
According to a new report by British insurance broker Howden, the cyber attacks on businesses in France, Germany, Italy and Spain over the past five years equated to over 307 billion euros in direct costs.
Despite this, cyber insurance remains relatively low across Europe, with more than 70 per cent of companies in the four countries uninsured, which is higher than the UK’s 61 per cent rate. The UK topped Howden’s table of most cyber insurance offerings, with 39 per cent; the next on the table is France, Spain and Germany tied on 29 per cent.
Head of cyber international, Howden, Jean Bayon de la Tour, said: “Cyber insurance is not just a protective measure, but a strategic enabler of resilience that accelerates recovery, strengthens risk management and reduces financial losses”.
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