"Financial services is one of our most productive and innovative sectors, helping to drive our economic recovery by creating jobs and growth across the country."
UK Finance has announced a new strategy to boost UK exports of financial services, stating that promoting global trade in financial services is "central to UK economic recovery".
The UK is the world’s top net exporter of financial services, above the United States and Switzerland, with a financial services trade surplus of $77 billion (equivalent to £60.3 billion) in 2019. The banking and finance industry currently employs over one million people across the United Kingdom, with over two-thirds of these jobs located outside of London.
The report identifies seven recommendations for the UK government and regulators to build on these strengths and promote international trade in banking, payments and other related services.
UK Finance says these changes would not only benefit the financial services sector but would boost the economy as a whole, by generating jobs across the country, lowering costs for consumers and helping firms in other sectors expand into overseas markets.
The report, International Trade in Financial Services, calls for a comprehensive strategy on “regulatory diplomacy”, in which UK financial regulators such as the Bank of England and FCA work with their counterparts in other countries towards improved market access. The aim of this would be to encourage other countries to open their domestic markets to UK-based financial services providers and promote cooperation in innovative areas such as AI, cybersecurity and fintech.
The report also proposes that the UK should use its position at key international bodies like the Financial Stability Board (FSB) and Basel Committee to push for global convergence in financial standards, making it easier for firms to operate across different countries. In addition, the UK should champion initiatives at the World Trade Organisation to support global free trade in services, while using new trade agreements to unlock market access for financial services in key markets such as Japan and the United States.
David Postings, chief executive of UK Finance, said: “The banking and finance sector is a significant contributor to the UK economy. The industry’s trade surplus is vital, and we are keen to work with the government and regulators to increase these benefits for the UK.
“We are setting out the tools available to policymakers to achieve this, from using regulatory agreements and free trade deals to open up new markets overseas to playing a leading role at global standard-setting bodies like the WTO and Basel Committee.
“This would deliver significant benefits for the wider economy as we recover from the impact of the Covid-19 pandemic, increasing exports in other sectors, generating jobs and driving down costs for consumers.
“The UK should seize the opportunity to be a global champion for free trade in financial services, building on our strengths as the world’s most open and international financial centre.”
Gerry Grimstone, UK Minister for Investment, added: “The UK has long been and continues to be a champion of free trade on the world stage.
“Financial services is one of our most productive and innovative sectors, helping to drive our economic recovery by creating jobs and growth across the country.
“I welcome the role that organisations such as UK Finance play in representing the interests of the Financial Services Sector as part of the UK’s ambitious global trade policy.”