By Hayley Kirton for City AM
Foreign investors can’t get enough of the UK’s financial services market, with a report out today discovering that fintech has helped push foreign direct investment (FDI) to its highest level since 2006.
The research by professional services firm EY discovered that, in 2015, there were 94 FDI projects in the UK’s financial services sector, which in turn generated 8,138 jobs.
By comparison, UK financial services FDI investment consisted of just 88 projects in 2014. Meanwhile, 2015’s level of investment in the UK represents a third of all financial services FDI in Europe.
The UK’s fintech offerings were highlighted as a key reason for the heightened investment, with three-quarters (73 per cent) of the investors polled by EY believing it was a strong driver in attracting investors.
Many investors were also confident in the financial services industry to keep delivering growth, with almost half (43 per cent) of those surveyed citing banking, insurance and wealth management as the pivotal drivers for growth, overshadowing the third (34 per cent) who had the same to say about the information and communications technology sector.
“This is the highest market share in FDI that the UK has seen for a decade, which should cheer the UK financial services industry, the Treasury and the wider business community,” said Omar Ali, UK financial services leader at EY. “Investors are optimistic about the UK’s strong domestic market, our commitment to maintaining an environment where businesses can grow and develop, and our burgeoning fintech industry.”
However, not everybody asked was so confident about the trajectory of the UK’s financial sector, with more than a quarter (27 per cent) of the financial services investors asked believing the UK would become less attractive to investors over the next three years.
Ali added: “The message is clear – as financial services FDI continues its steady but gradual recovery in Europe, the UK is leading the way. Our skilled workforce, strong policy environment and the dynamic and growing fintech sector all give us a significant competitive advantage.”
Commenting on the report, Will Straw, executive director of Britain Stronger In Europe, said:
This latest study clearly shows that Britain’s economy is stronger in the EU while leaving will put this crucial investment at risk. Nine out of 10 economists say leaving Europe and the single market will cost investment, cost jobs and damage our economic future.
However, Vote Leave chief executive Matthew Elliott remarked:
Pro-EU advocates have been unable to present a positive vision of Britain remaining in the EU so have run a campaign of doing down Britain’s economic prospects. The dynamism of the British economy is exceeding the doom-laden predictions of the remain camp.
First appeared for CityAM