The UK is Europe’s Most Attractive Destination for Financial Services Investment
The EY report stated that the UK attracted 56 FDI projects in the financial services sector. Forty-nine were new projects, while seven of them were expansions. While many other world countries were struggling to get a foothold (leave alone FDI projects), the UK did the unimaginable. France was also able to grab 49 projects followed by Germany. With this, the UK was able to retain its top position for financial services FDI.
Although the figure is highest amongst the European countries, it is substantially lower by 43 projects from the previous year. In 2019, the UK bagged 99 projects, and it was one of the best years for the country. The financial investment was going great guns. However COVID-19 pandemic slowed it down. However, in a year when investments were either negligible or almost fading for many, the UK could bag some good projects for financial services.
It must be noted that the European countries collectively lost 23% of their projects.
Nevertheless, the UK is the best bet today. So, what makes it so?
Unparalleled Recover Plans
The UK has better COVID-19 recovery plans making it an investment-friendly European country. In a survey, when global investors were asked about which country had the best COVID-19 recovery plans. 48% of respondents voted for the UK. In addition, 50% picked the UK as the most attractive location for financial services investment. Germany took the second spot with 38% and 33% respectively.
Most Loved Destination
More than half of the global investors in the survey said that they plan to set up or extend their operations in the UK in 2021. This would be up by 10% from September 2020. Also, a dramatic rise of 45% since April 2020. That is not all. Nearly half of the respondents said that their investment plans are unaffected by the COVID-19 condition. And 6% wish to increase their investment despite the threat of the third wave of the pandemic.
London is the most popular destination (44%) for investors, followed by Stockholm (19%) and then Amsterdam (17%). London received 38 projects down by 43%, followed by Scotland. Six projects went to two of its main cities – Edinburgh and Glasgow.
Omar Ali, U.K. financial services managing partner at EY, said the Brexit negotiations marked “a critical point in history for government, regulators and the industry” to safeguard the country’s financial sector. “While it’s unclear at this early stage how the pandemic will impact future projects, investor sentiment from April this year suggests UK financial services is in a strong position to adapt to the changes,” said Omar Ali.
The UK is great for Fintech Investment in 2021 and beyond
The UK is not only Europe’s most attractive location for Fintech investment; it is also the largest single destination for FinTech activity across Europe. From 2017 to 2020, €8.1 billion were invested in UK fintech companies; this is almost half of the investments across Europe. Germany is the second-best for Fintech investment.
All these aspects make the UK not only Europe’s most attractive but also one of its safest and most stable destinations. The survey shows a clear vote of confidence in Britain’s future from those who know best how the markets function and what they need from them: finance professionals from across Europe.
To sum up, there is no better person than Anna Anthony, UK financial services managing partner at EY. She said:
“The UK has consistently been the number one location for international financial services investment since EY started tracking FDI levels and market attractiveness over twenty years ago. While its lead may have narrowed in 2020, most likely only short-term in response to pandemic-related business disruption and Brexit, investor sentiment suggests that the UK is looking to a strong future, and will continue to outperform the rest of Europe in attracting post-Covid-19 financial services investment. Despite the challenges of the last few years, the evidence points to this not only continuing but growing in strength, ensuring the UK remains a world-leading financial services center.”
So, take that word if you are planning financial investment in Europe and thank us later!